New Delhi: With an uptick in food, fuel and power prices, India's wholesale inflation rose to a 13-month high of 1.26 per cent in April, from 0.53 per cent in March. The April month witnessed the sixth successive month that the wholesale price index or WPI increased on a year-on-year basis, after seven months of deflation. On a month-on-month basis, the WPI was up 0.8 per cent with primary articles and food prices rising nearly 2 per cent in April, while manufactured products were up 0.5 per cent, the government data showed on Tuesday.
It has been observed that WPI-based inflation has been rising for two months in a row with 0.20 per cent in February and 0.53 per cent in March, while it was 0.79 per cent in April last year. With the April WPI print, it is, however, expected that the Reserve Bank of India (RBI) may hold interest rates in the policy review next month.
As per the data, inflation in food articles rose to 7.74 per cent in April as against 6.88 per cent in March. “In the fuel and power basket, inflation stood at 1.38 per cent in April, up from (-) 0.77 per cent in the previous month. “Positive rate of inflation in April 2024 is primarily due to increase in prices of food articles, electricity, crude petroleum and natural gas, manufacture of food products, other manufacturing etc,” ministry of commerce & industry said in a statement.
The data further showed that in the food articles basket, vegetable inflation was 23.60 per cent in April, up from 19.52 per cent in the previous month. “Inflation in potatoes jumped to 71.97 per cent in April from 52.96 per cent in March. In onion, it was 59.75 per cent in April, versus 56.99 per cent in the previous month,” it showed.
Analysts and economists, however, feel that the wholesale inflation is likely to move up further as the WPI is heavily sensitive to global commodity prices, which is undergoing an upturn year after year. “A lot of commodity prices have shown an uptrend in the last few months, including the crude oil prices that we saw in April. As of now, what we have seen in commodity prices, I would expect the WPI to move up further and cross 2 per cent in the next two months of May and June,” Nayar said.
Reacting to the April WPI numbers, PHD Chamber of Commerce and Industry president Sanjeev Agrawal said that going ahead, inflation in food articles is expected to rationalise by September/October 2024 as many of the kharif crops will be entering the mandis and supplementing the existing supply.
The rise in April WPI is in contrast to the retail inflation data for the month. The central bank mainly takes into account retail inflation while framing monetary policy. Retail inflation eased to an 11-month low of 4.83 per cent in April. The RBI last month kept the interest rate unchanged for the seventh time in a row and said that it remains vigilant towards upside risks to food inflation.
