Wholesale Price Inflation
India’s wholesale inflation accelerated to a new high of 14.2% in November from 12.5% in October, led by a surge in primary food inflation that hit a 13-month high and a continued uptick in mineral, fuel and power, as well as oil and gas prices.
Primary food inflation is a 13-month high
The Office of the Economic Adviser, Department for Promotion of Industry, and Internal Trade (DPIIT) under the Ministry of Commerce & Industry releases the index numbers of wholesale price in India (Base Year: 2011-12).
The annual rate of inflation is 14.23% (Provisional) for the month of November 2021 (over November 2020) as compared to 2.29% in November 2020.
The high rate of inflation in November 2021 is primarily due to the rise in prices of mineral oils, basic metals, crude petroleum & natural gas, chemicals and chemical products, food products etc. as compared to the corresponding month of the previous year.
Primary Articles (weight 22.62%)
The index for this major group increased by (5.57%) to 168.6 (provisional) in November 2021 from 159.7 (provisional) for the month of October 2021.
Prices of Crude Petroleum & Natural Gas (12.24%), Minerals (5.96%), Food Articles (5.81%) and Non-food Articles (2.15%) increased in November 2021 as compared to October 2021.
Fuel & Power (weight 13.15%)
The index for this major group increased by (5.61%) to 131.7 (provisional) in November 2021 from 124.7 (provisional) for the month of October 2021.
Prices of Mineral Oils (8.76%) and Coal (1.16%) increased in November 2021 as compared to October 2021. Prices of electricity remain unchanged.
Manufactured Products (weight 64.23%)
The index for this major group increased by (0.89%) to 136.1 (provisional) in November 2021 from 134.9 (provisional) for the month of October 2021.
The increase in prices is mainly contributed by the manufacture of basic metals; chemicals and chemical products; textiles; other non-metallic mineral products and paper and paper products.
Some of the groups that have witnessed a decrease in prices are the manufacture of food products; other manufacturing; electrical equipment; tobacco products and leather and related products.
WPI food index (weight 24.38%)
The Food Index consisting of 'Food Articles' from the Primary Articles group and 'Food Product' from the Manufactured Products group has increased from 164.8 in October 2021 to 170.4 in November 2021.
The rate of inflation based on the WPI Food Index increased from 3.06% in October 2021 to 6.70% in November 2021.
In India, the wholesale price index (WPI) and the consumer price index (CPI) are used to calculate inflation (CPI).
WPI is a price index that measures price increases or inflation at the level of sellers or retailers that buy in bulk or 'wholesale'.
Because it monitors inflation at the retail or consumer level, the CPI is often known as retail inflation.
In India, the WPI is used to calculate the economy's inflation rate.
Wholesale price index (WPI)
It tracks variations in the prices of commodities sold and traded in bulk by wholesalers to other merchants.
The Ministry of Commerce and Industry's Office of Economic Adviser publishes this report.
In India, it is the most extensively used inflation indicator.
The general population does not buy things at wholesale prices, which is a major critique of this index.
In 2017, the base year of the All-India WPI was changed from 2004-05 to 2011-12.
Consumer Price Index
It tracks price fluctuations from the standpoint of a consumer.
The National Statistical Office publishes it (NSO).
The CPI measures the price differential between goods and services purchased by Indian consumers, such as food, medical care, education, and gadgets.
Food and beverages, fuel and light, housing and clothing, bedding and footwear are all part of the CPI.
The following are the four types of CPI:
CPI for Industrial Workers (IW).
CPI for Agricultural Labourer (AL).
CPI for Rural Labourer (RL).
The first three are compiled by the Ministry of Labour and Employment's Labour Bureau. The NSO of the Ministry of Statistics and Programme Implementation compiles the fourth.
The CPI's base year is 2012.
CPI data is used by the Monetary Policy Committee (MPC) to keep inflation under control. The Reserve Bank of India (RBI) adopted the CPI as its primary inflation indicator in April 2014.