Revision as of 11:46, 20 August 2015

Wholesale Price Index (WPI): 1975-2015

The Times of India, Aug 15 2015

Wholesale inflation lowest since '76

Falls for 9th month in a row to -4.1%, longest negative stretch since '75

Wholesale prices plunged for the ninth consecutive month in July on the back of a decline in food and fuel prices, raising prospects of a cut in interest rates to give a push to growth. This was the lowest level of the inflation based on wholesale price index (WPI) since 1976 and, according to economists, is the longest stretch of negative wholesale prices in the country since 1975.WPI inflation was in negative zone for 12 months between July 1975 and June 1976. Data released by the commerce ministry showed the wholesale inflation fell 4.05% in July compared to a decline of 2.40% for the previous month and 5.41% during the corresponding month of the previous year.

The sharp dip in WPI comes close on the heels of the significant moderation in retail inflation in July and together the two data sets have fuelled expectations of a cut in interest rates.

Food inflation fell 1.16% year-on-year in July , while vegetable prices fell 24.52% during the month. The price of pulses continued to remain a worry as it rose 35.75% in July .

India Inc stepped up its call for a reduction in interest rates, citing sharp decline in both WPI and CPI inflation data.“The distinct downturn in both retail and headline inflation and soft inflationary scenario makes a strong case for RBI to resume its accommodative policy stance,“ CII said.

Exports slide for eighth month

New Delhi: Hit by global slowdown, India's exports contracted for the eighth straight month by 10.3% in July to $23.1 billion, pushing the trade deficit to $12.81 billion. In July 2014, the merchandise exports had amounted to $25.8 billion.

Imports, too, declined by 10.28% to $35.9 billion in July.The trade deficit has narrowed from $14.27 billion in July 2014.

Price rise (Jan 2010-July 2014)

Pricey Places

The Times of India Aug 30 2014

Chart: The Times of India

Between Jan 2010-July 2014, India has seen retail prices rise 35.6% on average, equivalent to an annual rate of about 7%. But different states have witnessed varying levels of price rise.

Measuring inflation: Wholesale Price Index (WPI) and Consumer Price Index (CPI)

Wholesale Price Index (WPI) and Consumer Price Index (CPI): 2014, 2015; Graphic courtesy: The Times of India, Jun 08 2015

The Times of India, Jun 08 2015

The Wholesale Price Index (WPI) and Consumer Price Index (CPI) are two ways of measuring inflation. Because of different constituents and weights for them, the inflation rates measured by both indices are often different. What is noticeable in recent months is that the two indices are showing divergent trends. The CPI indicates that there has been a rise in prices, while the WPI suggests that prices have fallen.One reason for this could be that food prices, which constitute a much larger part of the CPI, are up significantly over the last year.SOURCE: MOSPI, Office of the Economic Adviser; Research: Atul Thakur; Graphic: Asheeran Punjabi