Union Ministry of Commerce and Industries in India has released the details on Wholesale Price Index (WPI) inflation. This WPI dropped to 2.76 percent in January month of 2019. This sudden drop of WPI resulted in lowering of fuel prices. Furthermore, the prices of some food items also dropped to lower rates.
If compared with the previous year, then WPI inflation stood at 3.8 percent in December month of 2018. Though, it was around 3.02 percent in the January month of 2018.
Inflation of manufactured products has a total weight of around 64.23 percent in Wholesale Price Index. It was dropped to 2.61 percent in the January month of the year 2019. WPI inflation dropped to 2.61 percent from 2.96 percent in 2018.
Wholesale based price inflation for ‘fuel and power’ segment dropped down to 1.85 percent. This drop was due to the lowering of prices of motor fuel and LPG. Moreover, it was around 8.38 percent in December month of 2018.
According to the Indian government, November Wholesale Price Index has also dropped in the recent few months. It has come down to 4.47 percent from the value of 4.64 percent.
The primary articles weight around 22.62 percent. Inflation of primary articles was around 2.53 percent in the January month of 2018 while it increased to 3.54 percent in the January month of 2019.
In the recent monetary policy review, Reserve Bank of India has decreased the borrowing rate by 0.25 percent. It is predicted that decreasing inflation can offer more headroom to RBI for cutting interest rate in the upcoming months.
Wholesale Price Index and the Consumer Price Index are two main indices for measuring inflation in India. Wholesale Price Index was supposed to be the main index for measuring inflation in India. But after April 2014, Reserve Bank of India declared Consumer Price Index (CPI) as the prime measure of Inflation in India.
Wholesale Price Index (WPI) is calculated by the Office of Economic Adviser in the Ministry of Commerce and Industry. Earlier, it was released on Primary Articles and Fuel group. Moreover, it was released on the weekly basis. Though, this weekly release was discontinued from 2012. Presently, WPI is released every month.