India`s Wholesale Price Index-based inflation eases to 10.7% in September

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New Delhi: India`s wholesale price index-based inflation eased to 10.7 per cent in September as against 12.41 per cent recorded in the previous month, as per the government data released on Friday. Despite the decline, Whole Price Index (WPI) based inflation has remained in double digits for the 18th month in a row. The Food Index consisting of `Food Articles` from Primary Articles group and `Food Product` from the Manufactured Products group have decreased from 176.0 in August 2022 to 175.2 in September 2022.

The rate of inflation based on WPI Food Index decreased from 9.93 per cent in August 2022 to 8.08 per cent in September 2022, according to data released by the Ministry of Commerce & Industry.

Inflation in September 2022 is primarily contributed by rise in prices of mineral oils, food articles, crude petroleum & natural gas, chemicals & chemical products, basic metals, electricity, textiles etc. as compared to the corresponding month of the previous year, the ministry said in a statement.

High inflation has been a big challenge for economic policymakers. India`s retail inflation surged to 7.41 per cent in September, remaining above the Reserve Bank of India`s mandated range of 2-6 per cent for the third straight quarter that would force the central bank to explain to the government the reasons for not being able to control the price rise.

As per the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation, data released on Wednesday, the Consumer Price Index (CPI) based inflation rose to 7.41 per cent in September from 7 per cent in the previous month.CPI-based retail inflation stood at 4.35 per cent in September 2021.

The price rise has been sharper in rural India. CPI based inflation in rural India surged to 7.56 per cent in September while for urban India it stood at 7.27 per cent.The headline inflation has been above the RBI`s mandated tolerance range of 2-6 per cent for three consecutive quarters. Under the flexible inflation targeting framework, the RBI is deemed to have failed in managing price rise if the CPI-based inflation is outside the 2-6 per cent range for three quarters in a row.

Now the RBI will have to explain to the government why inflation remained above the mandated 2-6 per cent range.The wholesale price index-based inflation has declined significantly in the recent month. The month-over-month change in WPI index for the month of September 2022 stood at -0.65 per cent as compared to August 2022.The WPI for September 2022 has been compiled at a weighted response rate of 85.1 per cent, while the final figure for July 2022 is based on the weighted response rate of 93.4 per cent. The provisional figures of WPI will undergo revision as per the final revision policy of WPI.