According to data released by the Ministry of Commerce and Industry on Monday, wholesale inflation based on Wholesale Price Index (WPI) rose to 5.13 per cent in September. WPI in August was at 4.53 per cent and in September last year it stood at 3.14 per cent.
Inflation in primary article, having 22.62 per cent weightage in WPI, too experienced a jump rising to 2.97 per cent from negative 0.15 per cent in August.
The rise in wholesale inflation is attributed to hardening of food prices and rise in cost of petrol and diesel. The ministry in a statement said, “The rate of inflation based on WPI Food Index consisting of ‘Food Articles’ from Primary Articles group and ‘Food Product’ from Manufactured Products group increased from -2.25% in August to 0.14% in September.” In the wholesale basket, onions, and eggs and meat witnessed deflation. Prices of pulses and fruits have also dropped. Deflation in vegetables was 3.83 per cent in September as against 20.18 per cent in the previous month. But inflation in potato witnessed a spike.
In ‘fuel and power’ basket, inflation in September was 16.65 per cent. Inflation in petrol and diesel surged to 17.21 per cent and 22.18 per cent, respectively. Liquefied petroleum gas (LPG) became more expensive by 33.51 per cent.
Inflation in manufacturing products with highest weightage in WPI rose by 0.6 percent compared to previous month data.
According to data released last week, India’s retail inflation showed a moderate rise to 3.77 per cent in September from 3.69 per cent in August. The Reserve Bank of India in formulating its monetary policy takes the retail inflation into consideration. The surge in retail inflation was driven by rising food and fuel prices and depreciating rupee. Devendra Kumar Pant, chief economist, India Ratings & Research noted that, “It suggests though the demand conditions in the economy have remained strong the pace of demand growth is gradually declining.”