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Food pushes wholesale inflation up to 1.62%
NEW DELHI: Costlier vegetables, pulses and sugar pushed wholesale price index (WPI) inflation for the third straight month in June to 1.62%, queering the pitch for
NEW DELHI: Costlier vegetables, pulses and sugar pushed wholesale price index (WPI) inflation for the third straight month in June to 1.62%, queering the pitch for the Reserve Bank of India to reduce rates in its August policy meet.
Wholesale inflation during June was also substantially higher than 0.79% in May and (-)2.13% in June 2015. Overall food inflation was at 8.18%
Inflation in vegetables shot up by 16.91% last month. While, inflation for cereals stood at 6.32%.
Potato, a daily consumable among Indian households, turned expensive during the month as buyers had to shell out 64.48% more than a year ago.
Among others, the rate of price rise in pulses was at 26.61%, sugar 26.09% and that for fruits the inflation during the month rose by 5.97%.
WPI inflation has been firming up for the last three months, after remaining in the negative zone for 17 months.
An elevated wholesale inflation in June follows a spike in retail inflation, announced on Tuesday, that hit a 22-month high of 5.77% during the month.
But, onion, minerals, fuel and power, and petrol became pocket friendly as prices declined by 28.60%, 20.75%, 3.62% and 8.74%, respectively.
“A jump of 37.4% in cereals inflation between May and June is a cause of worry. Although monsoon is expected to be above normal this year but some delay in its reaching in many parts of country delayed the sowing kharif crop,” said India Ratings principal economist Sunil Kumar Sinha .
“RBI would not be in a position to address the demand and supply in India when CPI is at high level, therefore now the economy of India is in need of strong actions from government to address the structural issues of demand and supply,” industry body Assocham said.
The rise in wholesale inflation is in line with expectations and is essentially on the back of rising food prices along with some catch up in commodity prices, according to Richa Gupta, senior economist at Deloitte.
