NEW DELHI: Buttressing concerns that price trends have begun moving towards an inflationary pattern, wholesale inflation numbers released by the commerce ministry on Thursday showed the Wholesale Price Index (WPI) based inflation stood at 3.93 per cent during November, an eight-month high. WPI inflation had stood at 3.59 per cent in October.
The numbers come just days after government data showed retail prices, based on the Consumer Price Index (CPI), had grown at 4.88 per cent, a 15-month high.
As with retail prices, WPI inflation was also boosted by strengthening fuel prices, as global crude rates have climbed past the $60 per barrel mark, and rising food prices in the domestic market. In fact, inflation in the overall food basket (including manufactured items) increased from 3.23 per cent in October to 4.1 per cent in November. Some major culprits include national staple onion, where inflation stood at a whopping 178.19 per cent, vegetables (59.80 per cent) and LPG (31.30 per cent).
Overall, the primary articles basket, which include vegetables, fruits, minerals, milk, eggs, etc grew at 5.28 per cent, while fuel and power grew at 8.82 per cent.
The Reserve Bank of India’s (RBI) Monetary Policy Committee had red-flagged risks to inflation during its policy review meeting last week, stating that the recent rise in international crude oil prices may sustain, especially due to the Organization of the Petroleum Exporting Countries’ decision to maintain production cuts through next year.
“In such a scenario, any adverse supply shock due to geopolitical developments could push up prices even further,” RBI had said. Meanwhile, Department of Economic Affairs secretary Subhash Chandra Garg acknowledged that the economy had seen mixed news during the week, “Both Consumer and Wholesale inflation further rose and IIP growth was quite subdued. Vehicles growth turned out to be quite robust. Hope vegetables prices would fall soon,” he tweeted.