Wholesale price inflation for January rises to 5.25% over spike in fuel prices
1 min read 14 Feb 2017, 12:31 PM ISTWPI shoots to 5.25% in January as fuel group inflation accelerated 18.14% in January from 8.65% a month ago due to rising petrol and diesel prices
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New Delhi: India’s wholesale price inflation (WPI) shot up to 5.25% in January from 3.39% a month ago on the back of rising fuel prices even as food and vegetable prices contracted during the month.
Data released by the Department of Industrial Policy and Promotion (DIPP) showed food inflation continued to contract by 0.56% in January against a contraction of 0.7% in December. However, fuel group inflation accelerated 18.14% in January from 8.65% a month ago, due to rising petrol and diesel prices.
Inflation for manufacturing items also rose marginally to 3.99% from 3.67% during the same period mostly due to higher prices of metal products, iron and steel and edible oils among others.
The DIPP also revised upward inflation estimate for November to 3.38% from the earlier provisional estimate of 3.15%. Data released by statistics department on Monday showed India’s retail inflation decelerated in January to 3.17% from 3.41% a month ago as prices of vegetables and pulses fell further.
Despite recognizing that retail inflation has fallen to its lowest level in two years, the Reserve Bank of India (RBI) last Wednesday surprised the market by holding policy rates unchanged and shifting its stance from accommodative to neutral, blaming stubborn non-fuel, non-food inflation.
However, RBI governor Urjit Patel on Saturday denied that RBI has shifted from its mandate of looking at the overall consumer price index (CPI) number to only the core inflation (non-food, non-fuel).
“...it is not change in the variable that we have been targeting by legislation. So it is not a change in stance at all. It is just a comment that CPI (consumer price index) excluding food and fuel has been difficult to bring down. Going forward, to work for bringing down inflation below 5% on a durable basis requires ex-food, fuel inflation also to come down," he said after the customary post-budget address by Union finance minister Arun Jaitley to the central board of the RBI.
When asked whether he is disappointed with the change in stance of RBI from accommodative to neutral, Jaitley said: “All finance minister have a perpetual desire. But by end of the day, we all respect the decision that the RBI takes."
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