According to data released by the Ministry of Commerce and Industry; WPI inflation stood at 2.59% in December as compared to 0.58% in November 2019. Consumer Price Inflation also reached the highest level in December 2019 at 7.35% since July 2014 (7.39%).
Crux of the Matter
The inflation based on WPI Food Index increased from 9.02% in November to 11.05% in December 2019.
The primary reason behind the rise in wholesale prices is High food prices that have resulted in higher retail inflation in December.
India’s retail inflation reached a 5-year high in December as the retail prices of vegetables shot up as high as 60%.
Primary articles inflation stood at 11.46% in December against 7.7% in November.
Food articles inflation was at 13.24% compared with 11.1% in November.
WPI inflation in the prices of onion remained highest at 455 per cent.
The index of non-food articles increased to 7.7% from 1.93% in November.
RBI said, “Persistently high inflation adversely impacts the economy’s allocative efficiency and impedes growth. It also contributes to a worsening of income distribution by depreciating the real income of the poor.”
Curiopedia
The Wholesale Price Index (WPI) is the price of a representative basket of wholesale goods. India has adopted new CPI to measure inflation. The WPI is published by the Economic Adviser in the Ministry of Commerce and Industry. The Wholesale Price Index focuses on the price of goods traded between corporations, rather than the goods bought by consumers, which is measured by the Consumer Price Index. The purpose of the WPI is to monitor price movements that reflect supply and demand in industry, manufacturing and construction. This helps in analyzing both macroeconomic and microeconomic conditions. More Info
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