Sept wholesale inflation eases to five-year low

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SME Times News Bureau | 14 Oct, 2014
Country's wholesale price inflation eased to its lowest levels in nearly five years at 2.38 percent during September compared to 3.74 percent in the previous month, aided by a moderation in food and fuel costs, government data showed Tuesday.

The wholesale price index (WPI) was at 7.05 percent during the corresponding month of the previous year, according to data released by the ministry of commerce and industry in New Delhi.

Food prices jumped by 3.52 percent year-on-year during the month under review. The food inflation had increased by 14.03 percent in September, 2013.

Prices of vegetables plunged by 14.98 percent in September year-on-year. Onion prices decreased by 58.12 percent.

However, potatoes' prices jumped by 90.23 percent. Fruits became dearer by 20.95 percent, while eggs, meat and fish became dearer by 4.12 percent year-on-year during the month under review.

Cereal prices were up 3.45 percent year-on-year. Rice was costlier by 6.87 percent. Wheat prices fell by 1.50 percent.

Fuel and power inflation rose to 1.33 percent in September as compared to 11.72 percent in the corresponding period of last year.

The prices of liquefied petroleum gas (LPG) grew by 2.83 percent, petrol became cheaper by 9.42 percent, however diesel was costlier by 10.10 percent.

Manufactured products' inflation rose to 2.84 percent in the month under review from 2.36 percent in September, 2013.

The WPI inflation for the month of Sep 2014 declined to 2.4 percent from 3.7 percent in Aug 2014, 5.4 percent in July 2014, 5.6 percent in June 2014 and 6.18 percent in May 2014.

The CPI inflation for the month of Sep 2014 also has declined to 6.46 percent as compared with 7.73 percent for the month of August 2014.

President, PHD Chamber of Commerce and Industry, Sharad Jaipuria said that decline in WPI inflation is encouraging and would pave the way for growth to pick up pace and make a ground for RBI to soften its interest rates regime in coming times.

"The recent developments including stability in prices, focus on bolstering the manufacturing sector, successful launch of Jan Dhan Yojana and Digital India programme and significant developments in the international economic relations, among others would go a long way to enhance India's growth trajectory," said Jaipuria.

"We expect a softening policy stance from RBI in the coming times. We believe a cut in repo rate would be inevitable to revive the industrial growth and demand to pick up pace. Revival of demand scenario would pave the way for revival of investment sentiment particularly in the infrastructure sector that would ease supply side constraints and contain inflation further," said Jaipuria.

"The recent measures taken by the government such as check on hoarding and bringing onions and potatoes in essential commodities list has helped to ease inflation in general and food inflation in particular," he said.

Going ahead, the effective implementation of policy reforms and check on hoarding at the grassroots level would help to strengthen the improved economic outcomes, added Jaipuria.