Industrial activity contracted for the third consecutive month in October by 3.8%, driven by a fall in activity across sectors, according to official data released on Thursday.

Separate data showed that retail inflation had surged to a 40-month high of 5.54% in November, driven by rising food inflation.

The Index of Industrial Production (IIP) had contracted by 4.3% in September and 1.1% in August.

Growth in the Consumer Price Index (CPI) accelerated in November for the fourth consecutive month. It stood at 4.62% in October.

This combination of contraction in industrial activity and rising inflation has led experts to fear that India is entering a phase of stagflation (a situation in which there is persistent high inflation combined with stagnant or declining demand).

Relevant for GS Prelims & Mains Paper III; Economics

Source: The Hindu