New WPI series in effect; August inflation at 8.5%

Inflation for the month of August stood at 8.51 per cent, according to the new Wholesale Price Inflation (WPI) series released by the government on Tuesday.

According to the old series, WPI inflation stood at 9.5 per cent for the month, the Commerce Ministry said. The old series referred 1993-94 as the base year.

Overall inflation in August witnessed a fall of 1.27 percentage points from 9.78 per cent in the month of July, the new series revealed. It considers 2004-05 as the base year.

According to the new index, inflation was 0.31 per cent in August last year.

"It (the new index) will help inform both the government and the people on how the prices are moving. It will give a robust picture and reflect actual price movement," Commerce Minister Anand Sharma told reporters here.

He said food inflation is still a cause of concern.

According to the new WPI data released on Tuesday, prices of primary articles - food, non-food articles and minerals - shot up 15.76 per cent on an annual basis.

Finance Minister Pranab Mukherjee said: "Inflationary pressure continues because of the erratic monsoon that has led t increased food prices. I do hope annualised inflation would be much lower in the new series."

Year-on-year, food articles became dearer by 14.64 per cent, while prices of non-food articles likes fibres and oilseeds soared 16.04 per cent. Minerals became 23.82 per cent more expensive.

Fuel and power, including LPG and petrol, registered an annual inflation of 12.55 per cent.

Manufactured products - foods products, beverages, tobacco, cotton textiles and wood - saw an average price rise of 4.78 per cent on an annual basis.

However, sugar became cheaper by 0.63 per cent year-on- year and leather and leather products also witnessed a fall of 0.08 per cent.

Consumer items widely used by the middle class, like ice-cream, mineral water, microwave ovens, washing machines, gold and silver are reflected in the new series of WPI inflation.

The new WPI series has 241 more items than the old index. With the additional items, the WPI now measures a total of 676 items against the earlier 435.