Rise in food prices pushes WPI inflation higher

New Delhi: An exponential rise in food prices pushed India’s annual rate of inflation based on wholesale prices to 1.88 per cent in July, official data showed here on Monday.

According to data from the Ministry of Commerce and Industry, the wholesale price index (WPI), with the revised base year of 2011-12, went up in July 2017 to 1.88 per cent from 0.90 per cent in June.  On a year-on-year (YoY) basis, the WPI had risen by 0.63 per cent in July 2016.

“The annual rate of inflation, based on monthly WPI, stood at 1.88 per cent (provisional) for the month of July, 2017 (over July, 2016) as compared to 0.90 per cent (provisional) for the previous month and 0.63 per cent during the corresponding month of the previous year,” the minstry said in the “Index Numbers of Wholesale Price in India” for July.

“Build up inflation rate in the financial year so far was 0.62 per cent compared to a build-up rate of 3.81 per cent in the corresponding period of the previous year.”  The wholesale prices had decelerated in June to 0.90 per cent from May’s rise of 2.26 per cent and an increase of 3.85 per cent reported for April.  On a segment-wise basis, expenses on primary articles, which constitute 22.62 per cent of the WPI’s total weightage, edged-higher by 0.46 per cent from a decline of (-)3.86 per cent in June 2017.

However, the acceleration in WPI prices for primary articles during the month under review was slower on a YoY basis, as it had risen by 6.03 per cent in July 2016.  Similarly, prices of food articles rose massively by 2.15 per cent from a deceleration of (-)3.47 per cent during June 2017 and a rise of eight per cent in July 2017.

In terms of food prices, the wholesale inflation rate for onion was lower year-on-year by (-)9.50 per cent, while that for potatoes plunged by (-)42.45 per cent.  In contrast, the overall, vegetable prices in July rose by 21.95 per cent, against a rise of 12.59 per cent in the same month a year ago.  As per the data, on YoY basis, wheat became cheaper by (-)1.16 per cent, while protein-based food items such as eggs, meat and fish became dearer by 3.30 per cent.

Prices of other major group under the WPI — manufactured products — which comprise nearly 64.23 per cent of the index, rose by 2.18 per cent. The sub-category of manufactured food products registered a rise of 2.09 per cent.  The fuel and power price major-index’s inflation accelerated by 4.37 per cent.  Segment-wise, the price of high-speed diesel rose by 5.49 per cent during July, while that for petrol climbed by 9.60 per cent, and for LPG by 0.28 per cent.

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Free Press Journal