India Inflation Data Update: Wholesale inflation broke records, food items became expensive, know the details…

India Inflation Data Update: Wholesale Price Index (WPI) inflation rose to 0.83% in December, the highest in eight months. This increase was due to increase in prices of food items. Earlier, it was -0.32% in November and -1.21% in October. The Commerce Ministry released wholesale inflation data today, December 14.

Daily essential items and food items became expensive

Inflation of daily necessities (primary articles) increased from -2.93% to 0.21%.

Food index inflation increased from -2.60% to 0%.

Wholesale inflation of fuel and electricity decreased from -2.27% to -2.31%.

Wholesale inflation of manufactured products increased from 1.33% to 1.82%.

Three components of wholesale inflation

Primary articles, whose weightage is 22.62%. The weightage of fuel and electricity is 13.15%, and the weightage of manufactured products is the highest at 64.23%. Primary articles are further divided into four parts:

Food items like grains, wheat, vegetables

Non-food items including oilseeds

mineral

crude petroleum

Retail inflation increased to 1.33% in November

Retail inflation increased to 1.33% in December compared to the previous month. This is the highest in three months. Earlier, it was 0.71% in November and 0.25% in October, which was the lowest in 14 years.

Impact of Wholesale Price Index (WPI) on the common man

Prolonged high wholesale inflation has a negative impact on most productive sectors. If wholesale prices remain high for a long time, producers pass the burden on to consumers. The government can control the Wholesale Price Index (WPI) only through tax.

For example, when crude oil prices rose sharply, the government reduced excise duty on fuel. However, the government can reduce taxes only up to a certain limit. In WPI, more weightage is given to manufactured goods like metals, chemicals, plastics and rubber.

How is inflation measured?

There are two types of inflation in India: retail and wholesale. Retail inflation is based on prices paid by ordinary consumers. It is also called Consumer Price Index (CPI). The Wholesale Price Index (WPI) measures the prices that one business charges to another in the wholesale market.

Different things are included in the calculation of inflation. For example, in wholesale inflation, manufactured products account for 63.75%, primary articles like food 22.62%, and fuel and power 13.15%. In retail inflation, food and beverages contribute 45.86%, housing 10.07%, and other items including fuel also contribute.

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