Wholesale inflation, calculated on the basis of Wholesale Price Index (WPI), increased to 2.03 per cent in January, in comparison to 1.22 per cent in December 2020, showed data released by Ministry of Commerce and Industry on Monday. Wholesale price-based inflation in January 2020 stood at 3.52 per cent, the date reflected.
"The rate of inflation, based on monthly WPI, stood at (2.03 per cent) (provisional) for the month of January, 2021 (over January, 2020) as compared to 3.52 per cent during the corresponding month of the previous year," the ministry stated.
The increase in WPI inflation came on the back of rise in manufactured products' prices, negating decline prices for primary articles, fuel and power, and food items. Rate of wholesale inflation for manufactured products during the month under review stood at 5.13 per cent. Meanwhile, the same in food basket was pegged at (-) 2.8 per cent.
Inflation for vegetables was (-) 20.82 per cent, whereas that for eggs, meat and fish stood at (-) 1.76 per cent. Inflation for milk was 3.56 per cent. Non-food articles registered rate of inflation at 4.16 per cent.
WPI inflation in fuel and power segment stood at (-) 4.78 per cent. While petrol reported WPI inflation at (-) 10.29 per cent, same for LPG stood at 2.68 per cent.
"Core WPI prices continue to make significant advances, with sequential gains hitting a decadal high. Within core WPI, price increases continued in base metals and textile products. With supply disruptions continuing to linger, and international commodities beginning to rise, we expect core WPI to remain elevated over the medium term. Gains in core WPI tend to be reflected in core CPI over the medium term, especially in an environment of demand revival, so it needs to be monitored closely going forward," said Rahul Bajoria, Chief India Economist, Barclays India.
In January, retail inflation based on consumer price index, stood at 4.06 per cent, marking the second month in the row that the figure stayed within the RBI-mandated tolerance bracket with an upper limit of 6 per cent.