Official data released on Thursday showed inflation as measured by the consumer price index (CPI) crossing the 11 percent mark in November on account of costlier vegetables and fruits such as onions and tomatoes.
The Index of Industrial Production (IIP) contracted in October after three months, mainly due to poor performances in manufacturing, mining and consumer durables.
Commenting on inflation, RBI Governor Raghuram Rajan said, "I think monetary policy also has a role to play in trying to balance demand and supply. Again, as I said, we are aware of the weak economy but we also have to take into account inflationary pressure."
The RBI, scheduled to review the monetary policy on December 18, hiked the key lending rate by 0.25 percent in each of it previous two policy reviews to contain inflation.
Before the data was released, the rupee closed 58 paise lower at 61.83 against the dollar while the 30-share benchmark Sensex plunged 246 points to close below the 21,000 level.
Persistently high inflation was touted as one of the main reasons for the defeat of the Congress party in the recently concluded assembly elections in the key states of Delhi, Madhya Pradesh, Chhattisgarh and Rajasthan.
In November, vegetable prices rose 61.6 percent from a year earlier, compared with a 45.67 percent increase in October. Fruits were 15 percent costlier.
The CPI data showed pulses were dearer by 1.2 percent, cereal prices by 12.07 percent and milk products by 9.06 percent last month.


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