Wholesale inflation reached to a 2 year high of 3.55 per cent in July after vegetables, pulses and sugar turned costlier. The last higher level than the July 2016 was in August 2014 at 3.74 per cent.
Wholesale price index (WPI) inflation in vegetables shot up by 28.05 per cent in July, while that in pulses rose 35.76 per cent.
Potatoes saw a price rise during the month at 58.78 per cent, rate of inflation in sugar was at 32.33 per cent and that for fruits rose by 17.30 per cent during the month. According to Ministry of Commerce items, barring onion, in the basket showed a rising price.
Industry body ASSOCHAM said that rise in Wholesale Price Index (WPI) is in line with industry’s expectation. It has asked the government check and address through supply side responses of pulses, vegetables, potato, fruits, fibres, food articles and sugar.
Industry has warned that increase in WPI may result in increase in CPI which may affect the households and final consumers badly.
India’s Wholesale prices have risen continuously for the fourth month. As per figures released by Government, WPI is at 3.55 percent for the month of July 2016 as compared to -4.00 percent during the corresponding month of the previous year.
WPI inflation, which was in the negative zone from November 2013 to March 2016, has been firming up for the last four months.
An elevated wholesale inflation in July follows spike in retail inflation that too hit a 23-month high of 6.07 per cent well above the RBI’s comfortable level.
(With Agency Inputs)