WPI in January 2021: Wholesale inflation, that is, the rate of increase in the prices of bulk commodities, reached 2.03 percent in January this year. This time, the reason for rising inflation is not the rise in prices of food items. Rather, prices of food items have come down in January. According to government data, in January 2021, the main reason for the rise in wholesale price-based inflation (WPI) ie wholesale inflation was the rise in the prices of manufactured products. Earlier, the wholesale inflation rate was 1.22 percent in December 2020 and 3.52 percent in January 2020.
According to data from the Ministry of Commerce and Industry, prices of food items moderated in January. However, the prices of manufactured goods rose. According to the data, the wholesale inflation rate of food items in January 2021 was down to minus 2.8 percent. In December 2020, the figure was (-) 1.11 per cent. During this period, the wholesale inflation rate of vegetables was recorded at minus 20.82 percent and the inflation rate for fuel and electricity was recorded at minus 4.78 percent. However, the wholesale inflation of potatoes was (-) 22.04 per cent. The weight of prime articles i.e. 22.62 percent in the wholesale inflation rate. However, the share of foot items is 15.26 per cent.
Prices of manufactured products rise
According to data from the Ministry of Commerce and Industry, inflation in the non-food category was recorded at 4.16 percent last month. However, the growth rate in the wholesale prices of manufactured products increased to 5.13 per cent, from 4.24 per cent in December 2020. Manufactured products account for 64.23 percent in the wholesale inflation index. That is, if prices rise in this category even a little, then the effect on inflation rate will be big.
Retail inflation was 4.06%
Meanwhile, retail inflation was recorded at 4.06 percent in January. Retail inflation data came last week. Let me tell you, the Reserve Bank takes into account the retail inflation data while deciding the interest rates in its monetary review meeting.
The Reserve Bank of India (RBI) kept the interest rates unchanged for the fourth consecutive meeting in the monetary policy announcement on 5 February. The Reserve Bank had announced that the inflation scenario has become favorable in the near future.