Wholesale Price Index inflation in October eases to 8.39 per cent

Wholesale Price Index inflation in October eases to 8.39 percent: In October, Wholesale Price-based Inflation (WPI) fell to its lowest level since March 2021. It fell below the double-digit mark for the first time since March 2021, falling to 8.39% in October from 10.70% in September.

Key Points

• Food inflation in October was 8.33 percent. Vegetable price inflation was 17.61 percent versus 39.66 percent. Inflation in ‘fuel and power’ was 23.17 percent, while inflation in manufactured goods was 4.42 percent.
• Figures for consumer price index inflation (CPI) or retail inflation are due later today. CPI is expected to fall from 7.41 percent in September to 6.73 percent in October, according to a Reuters poll of 47 economists.
• The RBI takes retail inflation into account when determining its monetary policy; the central bank raised interest rates by 190 basis points between May and September to reduce inflation rates that continued to rise above the tolerance band.

What is the reason behind the decrease in the rate of inflation?

The fall in the price of mineral oils, basic metals, fabricated metal products, except machinery and equipment; textiles; other non-metallic mineral products; minerals, etc., is primarily responsible for the decrease in the rate of inflation in October 2022.

What is WPI?

• It tracks changes in the costs of goods that wholesale companies sell and trade in large quantities to other companies.
• The Office of Economic Adviser, Ministry of Commerce and Industry, publishes the data for WPI, which measures the typical change in wholesale prices.
• In 2017, the base year for the All-India WPI was changed from 2004–2005 to 2011–12. WPI only considers changes in product prices.
• The WPI gives manufactured goods more weight. In India, it is the most frequently used inflation indicator.
• The fact that the general public does not purchase goods at wholesale prices is a major criticism of this index.

What is CPI?

• The CPI determines the variations in prices of goods and services that Indian consumers purchase for their own use, including food, healthcare, education, electronics, etc.
• The perspective of a retail buyer is used to measure price changes. The National Statistical Office (NSO) is responsible for its release.
• The CPI is divided into several subgroups, such as those for food and drink, energy and lighting, housing and clothing, bedding, and footwear.