Sensex, Rupee slipped amid fears of pandemic in March

The BSE Sensex went up by 1708 points, or 3.44%, driven by the impact of the epidemic, with the rupee hitting a level of 75 against the dollar, a frantic Monday for the economy, while inflation rose further in March. And industrial production declined sharply. February according to official figures.

India’s retail inflation rose to 5.52% in March 2021 from 5.03% in February, with urban areas recording a higher 6.52%. The Consumer Food Price Index rose to 4.94% from 3.87% in February, with a higher increase in food inflation in urban India to 6.64%.

Economists said industrial output, meanwhile, fell for the second consecutive month in February, down 3.6%, suggesting that the recovery is still volatile.

“On a discouraging note, infrastructure and construction materials recorded a contraction of 4.7% in February after exhibiting uninterrupted expansion in February 2020. Consumer non-durables production has shrunk in three of the last four months, suggesting that the sender remains weak at the bottom of the pyramid, ”said Aditi Nair, chief economist at ICRA.

Devendra Pant, chief economist of research and ratings in India, said that retail inflation during 2020-21 was the highest at 6.2% in the last seven years. “Rising retail inflation and falling wage growth are a double whammy for consumption demand, which is otherwise also under pressure.”

Mr. Pant said that the combination of higher crude prices and higher excise duty led to higher fuel prices driving transportation and communications inflation up to 12.5%, the highest since the current inflation index series began. Among services, inflation for household goods and services increased by 10 months, while entertainment and recreation services touched a 9-month high.

While April’s inflation numbers are expected to have some relief, as a base effect from last year’s national lockdown kick, inflation growth is expected to resume thereafter, Ms. Nair said.