NEW DELHI: farmers’ concern that they were not getting the right price for their produce, especially vegetables and fruits, was reflected in the 2.17 per cent slump in wholesale inflation in May – a five-month low. The figure was 3.85 per cent in April.
The prices of potato, onion and pulses fell for the third consecutive month due to supply glut, according to wholesale price index (WPI) data released by the commerce ministry on Wednesday.
The fall in prices of basic vegetables and pulses was reflected in ‘primary articles’, which accounts for a fifth of the entire WPI to -1.79 per cent in May against 4.38 per cent last year.
It needs to be mentioned that the weightage of primary articles has been increased to 22.6 per cent with the new base year (2011-12 instead of 2004-05), against 20.12 per cent earlier.
The change was done to capture structural changes in the economy and improve the quality, coverage and representatives of indices. Since August 2015, both consumer price index and WPI are converging towards each other.
“SBI Research in its earlier reports had mentioned that in the coming months, both CPI and WPI would perfectly converge. This has become true as the difference between CPI and WPI plunged to zero in May 2017,” Soumya Kanti Ghosh, group chief economic adviser, SBI said in a statement.
According to FICCI president Pankaj Patel, there is a case for supporting growth. “We hope RBI will take a relook into its monetary policy stance in the light of these new numbers.”
Potato prices fell by minus 44.36 per cent in May against 83.98 per cent jump last year. Pulses were down 19.73 per cent against a growth of 31.23 per cent last year.
“Some abatement in the prices of pulses, vegetables, potato, and onion through policy measures is appreciated. Policy makers should check and address the prices of products, which are still at higher levels and are of national importance including cereals, paddy and milk,” said Sandeep Jajodia, president of Assocham.