New Delhi, Nov 16 : Higher prices of primary goods, food items and costly transport fuel stiffened India’s October wholesale inflation on both sequential and year-on-year basis.
The annual rate of inflation, based on wholesale prices, rose to 12.54 per cent last month from 10.66 per cent in September.
Similarly, on a YoY basis, the Wholesale Price Index (WPI) data furnished by the Ministry of Commerce and Industry has risen exponentially over October 2020, when it stood at 1.31 per cent.
“The high rate of inflation in October is primarily due to the rise in prices of mineral oils, basic metals, food products, crude petroleum and natural gas, chemicals and chemical products etc, as compared to the corresponding month of the previous year,” the ministry said in its review of ‘Index Numbers of Wholesale Price in India’ for October.
“The month over month change in WPI index for October 2021 (as compared to September 2021) was 2.28 per cent,” it said.
As per the data, the primary articles segment, which has one of the highest weightage in the WPI, increased at a faster rate of 5.20 per cent in October as compared to 4.10 per cent reported for September 2021.
In the fuel and power segment, which has a weightage of 13.15 per cent, the rise in inflation was recorded at 37.18 per cent from 24.81 per cent in September 2021.
However, cost of manufactured products, which has a weightage of 64.23 per cent, increased at a faster rate of 12.04 per cent from 11.41 per cent.
Similarly, the growth rate of WPI food index consisting of food articles from the primary articles group and food products from the manufactured products group rose to 3.06 per cent from 1.14 per cent.
“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.”
According to Sunil K. Sinha, Principal Economist, India Ratings and Research: “This is the seventh consecutive month in which wholesale inflation has stayed at double-digit level.”
“A sharp surge in the momentum effect of 2.3 percentage point was the reason behind rise in wholesale inflation in October 2021. This primarily came from the fuel and power inflation which jumped to 37.18 per cent in October from 24.81 per cent in September 2021. Within fuel and power group, electricity prices showed a sharp jump to 10.8 per cent in October 2021 from a deflation of 6.74 per cent in September 2021.”