However, experts are doubtful whether the uptick would sustain in September. However, economists expect retail inflation to rise soon.
RBI pared down its economic growth projection based on gross value added (GVA) to 6.7% for 2017-18 from 7.3% estimated earlier blaming the tepid growth in foodgrains production, adverse impact of implementation of Goods and Services Tax on the industries and weak consumer confidence. The IIP in August 2016 had registered a 4% growth, while the previous high was 5.7% in November 2016.
The worrying factor, however was manufacturing sector growth, which decelerated to 3.1 per cent in August from 5.5 per cent a year ago. Moreover, mining and electricity sectors recorded healthy performances on the back of coal and thermal electricity. "However, 13 of the 23 sub-sectors of manufacturing with a weight of 27% in the IIP, recorded a contraction in August 2017".
Meanwhile, the July IIP number was revised to 0.94 per cent from 1.2 per cent provisional estimates released last month.
India's consumer price inflation held steady in September, defying expectations for an acceleration, preliminary data from the Central Statistics Office showed Thursday.
Food price inflation that measures kitchen costs, remained soft at 1.76 per cent. Vegetables prices grew at 3.92 per cent in September as compared to 6.1 per cent in August. Mr. Sabnavis further said, "We do retain our CPI inflation target of 4-4.5% by March 2018". The drop in inflation could also raise demands for a rate cut now from the Reserve Bank of India that had kept the benchmark rates unchanged due to rising inflation trend.