The Wholesale Price Index (WPI)-based inflation in India turned negative in April, registering a figure of -0.92 per cent, according to data released by the Ministry of Commerce and Industry.
The Wholesale Price Index (WPI) inflation has reached its lowest point since August 2020. This marks a sharp decline from the previous month, when the WPI inflation stood at 1.34 per cent in March.
The WPI is a measure of the average change in the prices of goods sold in bulk by wholesale businesses to other businesses or organizations. It is different from the Consumer Price Index (CPI), which tracks changes in retail prices of goods and services purchased by households.
The negative WPI inflation rate in April indicates a deflationary trend in the Indian economy, which could be attributed to various factors such as a decline in demand for goods, reduced production costs, or a decrease in the price of raw materials.
According to the ministry, the decrease in the inflation rate in April 2023 can be primarily attributed to the decline in prices across various sectors. The notable contributors to this decline include basic metals, food products, mineral oils, textiles, non-food articles, chemical & chemical products, rubber & plastic products, as well as paper & paper products.
In terms of specific data, the Wholesale Price Index (WPI) food inflation in April recorded a modest increase of 0.17 percent, a significant decrease from the 2.32 percent observed in March. The inflation rate for manufactured products experienced a substantial drop, reaching its lowest point at -2.42 percent in April. By comparison, the inflation rate in this category was -0.77 percent in March.
In April 2023, the primary articles category experienced a 1.6 percent inflation, while the fuel and power category saw a slightly lower inflation of 0.93 percent. The Ministry has reported that there was an increase in prices for Crude Petroleum & Natural Gas, Minerals, and Food Articles during this period.
Specifically, Crude Petroleum & Natural Gas prices rose by 3.47 percent, Minerals by 2.30 percent, and Food Articles by 1.45 percent when compared to March 2023. On the other hand, the prices of Non-food Articles decreased by 0.66 percent in April 2023 as compared to March 2023, according to the ministry’s statement.
In India, inflation is measured using two indices: the consumer price index (CPI) and the wholesale price index (WPI). These indices calculate monthly changes in the prices of goods and services, using different approaches. The data collected from these indices assists the government and Reserve Bank of India (RBI) in comprehending price fluctuations in the market, enabling them to monitor inflation effectively.
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