New Delhi, Nov 12 (Agency) India’s wholesale price-based (WPI) based inflation rose to 12.54 per cent year-on-year in October, 2021 from 1.31 per cent in October, 2020 and against 10.66 per cent in September. The spike in inflation is due to rise in prices of mineral oils, basic metals, food products, crude petroleum & natural gas, and chemicals & chemical products, as compared to the corresponding month of previous year, as per provisional data released by the Ministry of Commerce and Industry on Monday.
WPI has now remained in double-digits for seven consecutive months. Overall, the fuel and power basket rose 37.18 per cent in October from 24.81 per cent in September and 26.09 per cent in August. “Broad-based input price pressures amid a depreciating INR, as well as a spike in vegetable and electricity prices, pushed the WPI inflation to a higher-than-expected five month high 12.5 per cent in October 2021, with the core inflation rising to a fresh all time high of 11.9 per cent,” said Aditi Nayar, chief economist, ICRA. “Other than non-food primary articles and minerals, all the commodity sub-groups recorded an uptick in YoY inflation in October 2021, relative to the previous month,” she added. The data for the month over month change in major groups of WPI in October showed that the index for primary articles increased by 3.10 per cent, prices of crude petroleum and natural gas rose by 9.48 per cent, prices of food articles rose by 5.05 per cent. Prices of non-food articles declined by 4.59 per cent, prices of minerals declined by 4.16 per cent declined in October, 2021 as compared to September, 2021. The index for fuel and power increased by 8.72 per cent to 124.7 from 114.7 for the month of September, 2021.
There was increase in prices of electricity by 18.84 per cent, of mineral oils by 7.74 per cent and of coal by 0.94 per cent. The index for another major group, manufactured products, increased by 0.82 per cent to 134.9 in October, 2021 from 133.8 for the month of September, 2021. Out of the 22 NIC two-digit groups for manufactured products, 18 groups have witnessed increase in prices, three groups have witnessed decrease and for one group, the prices remained unchanged in October, 2021, as compared to September, 2021. The increase in prices is mainly contributed to manufacture of basic metals; chemicals and chemical products, electrical equipment, rubber and plastics products and textiles. According to Nayar, early data for November 2021 suggests a continuation of rise in prices of vegetables such as potatoes, tomatoes and onions, which will weigh against a seasonal moderation in the food index in the current month. Nayar expected that with demand reviving, producers will start passing through higher input and freight costs, even as the tax cuts on fuels will offer them a breather. Led by the base effect, the WPI inflation is expected to moderate in the months ahead, and print at 7.5-8.5 per cent in March 2022. Some of the groups that have witnessed decrease in prices in October 2021 as compared to September, 2021 are manufacture of food products, motor vehicles, trailers and semi-trailers, printing and reproduction of recorded media. The prices of manufacture of computer, electronic and optical products remain unchanged in October, 2021, as compared to September, 2021.