New Delhi: According to Commerce Ministry, on May 17, India’s inflation based on the Wholesale Price Index (WPI) rose further to 15.08 percent in April from 14.55 percent in March.
A year ago, WPI inflation was 10.74 percent. Another 10 percent-plus print in April means WPI inflation has extended its stay in double-digit territory to 13 months in a row.
The spike in wholesale inflation in April, comes after data released on May 12. It showed the more closely tracked headline retail inflation rate based on the Consumer Price Index (CPI) jumped to 7.79 percent in April – the highest since May 2014, or 95 months.
Expectations in inflation increase in April forced the Reserve Bank of India’s (RBI) Monetary Policy Committee to meet more than a month in advance of their scheduled meeting in June and announce a 40-basis-point hike in the repo rate.
The April inflation reading of 15.08 percent is the highest in the current series, with data beginning in April 2013. As a result, the most recent wholesale inflation figure is at least nine years old.
In April, inflation was pushed higher by an increase in consecutive pricing pressures across the board. The WPI’s overall all-commodities index increased by 2.1 percent month over month in April, while the gasoline and electricity index increased by 2.8 percent.
The manufactured products index, which makes up 64.23 percent of the WPI basket, increased by 1.7 percent in April over March.
The food index posted the highest sequential gain in April, rising 3.4 percent month-on-month. This will leave the policymakers worried.
“The heatwave led to a spike in prices of perishables such as fruits, vegetables and milk, which along with a spike in tea prices pushed up the primary food inflation,” noted Aditi Nayar, ICRA’s chief economist.
“In terms of inflation, manufactured products inflation rose to a five-month high of 10.85 percent in April, pushing up core WPI inflation to a four-month high of 11.1 percent,” Nayar said.
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