Wholesale Inflation at 13-Month High: Wholesale inflation has increased to 1.26% in the month of April. This is the highest level of inflation in 13 months. Earlier, the wholesale inflation rate was 1.34% in March 2023. Inflation has increased due to increase in the price of food items. Whereas a month before this, in March 2024, it was 0.53%. At the same time, wholesale inflation was 0.20% in February and 0.27% in January.
Food inflation increased in April
- Food inflation rate increased from 4.65% to 5.52% in March.
- The inflation rate of daily necessities has increased from 4.51% to 5.01%.
- Wholesale inflation rate of fuel and power increased from -0.77% to 1.38%.
- The wholesale inflation rate of manufacturing products increased from -0.85% to -0.42%.
Retail inflation declined
Earlier in April, the retail inflation rate was the lowest in 11 months. In April, it has come down to 4.83%. In June 2023, it was 4.81%. However, food items have become expensive in April. The National Statistical Office released these figures on Monday 14 May.
Whereas a month ago i.e. in March 2024, the inflation rate was 4.85%. Food inflation has increased from 8.52% to 8.78%. Rural inflation has come down from 5.45% to 5.43% and urban inflation has come down from 4.14% to 4.11%.
Impact of WPI on the common man
If wholesale inflation remains high for a long time, it has a bad effect on most productive sectors. If the wholesale price remains high for a very long time, then the producers pass on the burden to the consumers. The government can control WPI only through tax.
For example, in the event of a sharp rise in crude oil, the government had reduced excise duty on fuel. However, the government can reduce tax cuts only within a limit. Factory related goods like metal, chemical, plastic, rubber have a higher weightage in WPI.
How is inflation measured?
There are two types of inflation in India.
One is retail and the other is wholesale inflation. The retail inflation rate is based on the prices paid by the common customers. It is also called Consumer Price Index (CPI).
On the other hand, Wholesale Price Index (WPI) means the prices that one trader charges from another trader in the wholesale market.
Different items are included to measure inflation. For example, in wholesale inflation, manufactured products have a share of 63.75%, primary articles like food 20.02% and fuel and power 14.23%. Whereas, in retail inflation, food and products have a share of 45.86%, housing 10.07% and other items including fuel also have a share.
