WPI: Wholesale inflation fell to a four-month low of 1.31 per cent in August. However, onion and potato prices saw a rise.
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WPI: Wholesale inflation fell to a four-month low of 1.31 percent in August due to cheaper vegetables, food items and fuel. However, prices of onion and potato saw a rise. The government released the Wholesale Price Index (WPI) based inflation data on Tuesday. According to the data released, the wholesale inflation rate of food items also declined in August. It was 3.11 percent in August, while it was 3.45 percent in July. Vegetable prices declined by 10.01 percent in August. However, inflation of potato and onion remained high at 77.96 percent and 65.75 percent respectively in August.
Impact on retail inflation
Rating agency ICRA said that although Kharif sowing has been good so far, additional rainfall in the current month may delay Kharif harvesting. However, sowing of Rabi crops is likely to pick up due to adequate storage in reservoirs at the all-India level. At the same time, Barclays said that the risk of impact on retail inflation has reduced due to reduction in manufacturing costs due to fall in energy and metal prices.
Indications of reduction in policy interest rate
RBI Governor Shaktikanta Das has indicated that if inflation remains under control in the coming days, a reduction in the policy interest rate is possible. This decision will be taken on the basis of the long-term inflation rate. The RBI’s monetary review committee meeting is to be held in October. RBI can take a decision on the reduction in the meeting to be held in December.
Inflation index fell due to reduction in manufacturing cost
Associate Professor of National Institute of Public Finance and Policy, Radhika Pandey says that the manufacturing sector has a share of about 65 percent in the wholesale price index, which includes textiles, machinery and other types of production. Due to the decrease in the prices of oil and other types of energy, the manufacturing cost has decreased last month, due to which a decline has been recorded in WPI. At the same time, the price related to food items has a greater share in the Consumer Price Index. CPI has also seen a decline in the last few months, but there has not been a big decline in it yet because somewhere the prices of food items are still rising.
Such ups and downs came
August 1.31
● Figures in percentage