As per data released by the Central Statistics Office (CSO), the average annual rate of inflation as per the consumer price index (CPI) in June last year was 1.46 per cent.
The consumer food price index (CFPI) in June at 2.91 per cent, however, softened as compared to the 3.10 per cent of the previous month. The inflation in vegetables dropped to 7.8 per cent from 8.04 per cent in the previous month.
The CPI for the 'fuel and light' category rose to 7.14 per cent in June, from 5.8 per cent in May.
The higher inflation last month comes in the backdrop of rising global crude oil prices which have been ruling at over $75 a barrel.
Breaking the cycle of interest rate cuts begun in January 2015, the Reserve Bank of India (RBI), at its last monetary policy review in June, raised its repo rate by 25 basis points to 6.25 per cent citing inflationary concerns.
It also revised upwards its inflation projection to 4.8-4.9 per cent for the first half of the current fiscal.
The fall in the Index of Industrial Production in May was caused by a sharp slowing in the growth of the manufacturing sector which registered a growth of 2.8 per cent, as compared to 5.2 per cent in April.
"The industry group 'Other manufacturing' has shown the highest negative growth of (-) 31.9 percent followed by (-) 15.6 percent in 'Manufacture of tobacco products' and (-) 12.8 percent in 'manufacture of wearing apparel'," a CSO statement said.
"The industry group 'Manufacture of computer, electronic and optical products' has shown the highest positive growth of 27.0 per cent followed by 21.1 percent in 'Manufacture of motor vehicles, trailers and semi-trailers' and 13.2 percent in 'Manufacture of furniture'."
Mining output in May at 5.7 per cent in May improved marginally over the 5.1 per cent in April.
Electricity production in the month under consideration rose to 4.2 per cent over the 2.1 per cent in April.
The cumulative IIP growth for the period April-May 2018 over the corresponding period of the previous year stands at 4 per cent, the statement added.
The IIP for April has been revised to 4.8 per cent, from the earlier figure of 4.9 per cent.
Commenting on the IIP data, Deloitte India Lead Economist Anis Chakravarty said in a statement: "The recent easing came largely on the back of manufacturing, while improvements were made across mining and electricity. That said, the movement in manufacturing remains largely steady which bodes well for economic growth, especially when the economy remains at risk from global changes."
"A clear positive was on food price momentum that remained muted... Although core remains elevated that may keep RBI on guard. We have not yet removed the 'risk' of one more rate hike," said Yes Bank Group President Shubhada Rao.
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