Inflation has started hitting the Indian economy and the common man’s pocket one after the other. After the recent bad news on the retail inflation front, now the inflation data based on Wholesale Price Index (WPI – Wholesale Price Index) has created a wave of concern across the country. According to the latest data released by the Ministry of Commerce and Industry, a huge jump has been recorded in the country’s wholesale inflation rate in the month of September and it has directly increased to a high level of 11.39%. This uncontrolled figure of wholesale inflation has shocked everyone from the industry to the common consumers. Experts believe that when things become so expensive at the wholesale level, then in the coming weeks, it directly impacts the retail prices of goods, vegetables, pulses and packed foods sold in the market, making it more difficult to run a household.
The reason behind this historic increase in wholesale inflation in the month of September is mainly the huge increase in the prices of food articles, manufacturing goods and fuel and power. The wholesale prices of every essential item used in the kitchen like pulses, vegetables, fruits, milk, and edible oils are continuously skyrocketing. Apart from this, fluctuations in crude oil prices in the global market and rising costs of diesel, petrol and electricity at the domestic level have made transportation expensive. When the transportation cost of bringing goods from factories to the market increases, wholesalers are forced to increase the prices of goods. The huge increase in wholesale prices of everyday vegetables like potatoes, onions and tomatoes has ruined the entire kitchen budget of the common man.
The direct and deepest impact of these inflation figures is on the middle class and poor families of the country. Due to continuously increasing wholesale inflation, companies have also started increasing the prices of their manufactured products, the effect of which is clearly visible on the FMCG sector, automobile and electronics market. While the income of the common man is stable, the prices of everything in the market are rising at the speed of rockets. Children’s school fees, house rent, electricity bill and now food items – everything has become so expensive that the monthly savings of the family have reached the verge of becoming completely zero. People are now being forced to cut down on their purchases of essential goods, which is expected to have a negative impact on demand in the market.
After wholesale inflation has reached this dangerous level of 11.39%, now a big challenge has arisen before the policy makers of the Reserve Bank of India (RBI) and the Central Government. The central bank is constantly trying to control liquidity in the market through interest rates and repo rates, but due to supply chain problems and global reasons, inflation is not coming under control. Economic experts suggest that the government will have to take immediate effective steps to strengthen the supply side, put a strict ban on hoarding and black marketing and take measures to reduce costs in agriculture and transportation sectors. Unless there is relief on the wholesale inflation front, the common man will have to face this period of rising prices.