India's wholesale inflation eases to 8.39% for Oct, falls below double digits after 18 months

India's wholesale inflation eases to 8.39% for Oct, falls below double digits after 18 months

The wholesale price index-based inflation had been recorded at 10.70 per cent for September.

FPJ Web DeskUpdated: Monday, November 14, 2022, 12:49 PM IST
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India's wholesale inflation has fallen to 8.39 per cent for the month of October, compared to 10.70 per cent in September, to drop below double digits for the first time in 18 months. The WPI is driven largely by manufactured goods, since it looks at inflation from a producer's point of view. This is why the current relaxation in wholesale inflation is a result of mineral oils, textiles, metals and non-metal minerals.

Wholesale inflation went down, even as the inflation among primary articles went up by 11.04 per cent. These articles consist of food and non-food products, and can include fuel, power, crude, minerals and oil seeds.

WPI is different from Consumer Price Index (CPI), which focuses on how much customers are paying for goods, to gauge inflation. Unlike CPI, WPI isn't affected that much by food inflation, which has surged past 8 per cent this year, as compared to 0.06 per cent for October 2021. Instead of individual expenses or household bills, the WPI looks at cost of raw material or goods procured in bulk.

Although the wholesale inflation goes down, it doesn't necessarily mean that consumers will also find relief from price rise. This is because food rates come into play while calculating retail inflation, with grains and vegetables making up a bulk of the household basket. Global food inflation had pushed the CPI to 7.41 per cent for September, but RBI is hopeful that it will fall below 7 per cent in October.

This would provide little relief, since the banking regulator also maintained that retail inflation above the target of 6 per cent will be harmful for India's economic growth.

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