Retail inflation rose to a five-month high of 3.36 per cent in August due to costlier vegetables and fruits.
The consumer price index (CPI) based inflation stood at 2.36 per cent in the previous month.
The August inflation number is the highest since March 2017, when it was recorded at 3.89 per cent.
Overall food inflation in August also moved up, reversing the deflationary trend, to 1.52 per cent, government data showed today.
Daily consumables like fruits and vegetables turned costlier during the month with inflation print coming at 5.29 per cent and 6.16 per cent, respectively as against 2.83 per cent and (-)3.57 per cent in July, according to the data released by the Central Statistics Office (CSO).
Likewise, prepared meals, snacks and sweets as a category turned dearer with the rate of price rise at 1.96 per cent from 0.43 per cent in July.
Also, transport and communication means were costlier during the month with inflation rising to 3.71 per cent from 1.76 per cent in July.
However, items such as cereals and products, meat and fish, oils and fats became cheaper at inflation prints at 3.87 per cent, 2.94 per cent and 1.03 per cent, respectively.
Meanwhile, industrial production grew a meagre 1.2 per cent in July from 4.5 per cent a year ago, bearing the brunt of a dismal show of the manufacturing sector -- especially that of capital goods -- putting pressure on RBI to lower rates further.
Factory output measured in terms of index of industrial production had declined by 0.2 per cent in June, according to revised estimates released by the Central Statistics Office (CSO) today.
During April-July, IIP grew by 1.7 per cent, down from 6.5 per cent in the same period last year.
Growth of the manufacturing sector, which makes up 77.6 per cent of the index, decelerated sharply to 0.1 per cent in July compared to 5.3 per cent in the same period of 2016.
Output of capital goods -- a proxy for infrastructure investments in the country -- contracted 1 per cent in July as against a growth of 8.8 per cent in the year-ago period.
Consumer durable goods met with similar fate, with production declining 1.3 per cent as against a nominal growth of 0.2 per cent a year earlier.
However, electricity generation stood out as it posted a growth of 6.5 per cent in July, up from 2.1 per cent in July 2016. Mining output too expanded by 4.8 per cent, as against 0.9 per cent in the year-ago month.
Consumer non-durables have recorded a growth of 3.4 per cent.
A total of eight out of 23 industry groups in the manufacturing sector grew in July 2017 compared to the corresponding month last year.