The country’s wholesale inflation stood at 3.15% in November, lowest in last 5 months, primarily on account of lower food and vegetable prices.
The demonetization exercise kicked off on November 8 has led to an acute cash crunch and weakening of demand. In October, it was 3.39%.
Food prices went up 1.54% from a year earlier, following a 4.34 percent rise in the preceding month. Among food prices, potatoes recorded the highest rise (37%), followed by pulses (21.7%). In contrast, prices declined for onion (-51.5%) and vegetables (-24%).
Cost of manufactured products increased by 3.2%, compared to a 2.7% rise in the previous month.
The WPI inflation for September has also been revised upwards at 3.8% against the provisional estimate of 3.57%.
Wholesale rates, measured by the wholesale price index (WPI), indicates the annual rate of price rise in bulk buys for traders reflecting the.
Retail inflation, announced on Tuesday, too dropped to a two year low of 3.63% reflecting lower consumer demand.
Industry body Assocham said that the fall in WPI numbers was in tandem with the expectations and was due to the “depressive state in the Indian economy” owing to the demonetisation announcement.