India’s wholesale inflation in negative for 17th month

New Delhi, April 18:

As prices of pulses continued to remain firm, India’s annual wholesale inflation rose a tad to (-)0.85 percent for March from (-)0.91 percent in the month before, while remaining in the negative zone for the 17th straight month, official data showed on Monday.

INFLATIONAs per data on official wholesale price index (WPI) released by the Commerce and Industry Ministry, annual inflation in pulses was 34.45 percent in the month under review, as the result of which the rise in food article index over the like period was well above the general index at 3.73 percent.

But prices of onions were down 17.65 percent and vegetables in general lower by 2.26 percent.

Thanks to a significant fall in prices of transport fuels — 9.87 for petrol and 9.79 percent for diesel — the index for fuel and power was also down by 8.30 percent. And the index for the other major group of manufactured products was down 0.13 in March.

Last week, data on consumer price index released by the Central Statistics Office showed that the retail annual inflation had fallen to a six-month low of 4.83 percent in March from 5.26 percent in February. The retail food inflation also fell to 5.21 percent from 5.30 percent.

The Reserve Bank of India expects the retail inflation to rule at around 5 percent by the end of this fiscal.

On its part, India Inc welcomed the March wholesale inflation figures and called for further easing of the monetary policy.

Industry body Confederation of Indian Industry (CII) said that underlying inflation trajectory remains benign, with wholesale price inflation in the negative zone.

According to Chandrajit Banerjee, director general, CII, WPI indicates a price stabilisation trend at a moderate level when taken in consonance with lower retail inflation.

“Going forward, the prospects of normal monsoon along with subdued global commodity prices and favourable government policies should restrain upside pressures on inflation,” Banerjee said in a statement.

“This should provide the space to the RBI (Reserve Bank of India) to retain the dovish stance towards monetary policy and open up the door for further easing of policy rates during the current year.”

Another industry chamber, the Federation of Indian Chambers of Commerce and Industry (FICCI), noted that the pressure arising from the food segment seems to have moderated.

“The pressure which was seen arising from the food segment seems to be moderating, with prices of vegetables and fruits reporting a decline,” Harshavardhan Neotia, president, FICCI, said in a statement.

“Further, recent meteorological prediction indicates expectation of normal rainfall this year which is a huge positive.”

Neotia further said that the impetus has to be on strengthening the domestic economy.

“The latest IIP (Index of Industrial Production) numbers do indicate an improvement in industrial growth, but the recovery has to take place on a sustainable basis,” Neotia added.

“Current inflation trajectory combined with positive monsoon forecast provides enough room for further accommodation in the policy rates which is critical for reviving the capex cycle in the economy.”

The ASSOCHAM (Associated Chambers of Commerce and Industry of India) pointed out that pulses price rise needs to be addressed through supply side responses.

“Although predictions of weather department are in favour of ongoing Rabi season but policymakers should contain the upward price pressure if it exists in the coming months,” said Sunil Kanoria, president, ASSOCHAM.

“Besides, continuous fall in manufactured products may hamper pricing power and profitability of manufacturers and producers which may further limit their potential to increase capital expenditure.” (IANS)

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