New Delhi. The beginning of July has brought positive signs for India’s economy. According to data from the wholesale price index (WPI) for the month of June released by the government, the country’s wholesale inflation rate -0.13 per cent has been recorded. This is the lowest level of the last 20 months, indicating that the government’s efforts towards control of prices are proving effective.
Decline in inflation: what things played a big role
According to the government, the main reason for this decline in wholesale inflation is the decrease in the prices of items like mineral oils, crude oil, natural gas and original metals. The softening in the prices of these goods has reduced the cost of production, which has reduced the pressure on overall inflation. In particular, there has been a sharp decline in wholesale food inflation. It was 1.72 per cent in May, which fell to -0.26 per cent in June. At the same time, the inflation rate of manufactured goods also declined slightly to 1.97 percent, which was 2.04 percent in May.
Third consecutive month below 1%
This is the third consecutive month when the wholesale inflation has been below 1 percent. This is a stable economic indicator and indicates that prices are not getting a big boom at the level of production and distribution. This has also brought relief to industries, as low costs reveal the possibility of increasing profits.
WPI vs CPI: What is the scope of wholesale inflation?
It is necessary to understand the difference between the wholesale price index (WPI) and the Consumer Price Index (CPI). WPI measures changes in the prices of goods that are bought and sold in bulk-such as raw materials, petroleum, metals etc. This is originally a reflection of prices recorded at the factory gate. In contrast, CPI measures the prices of goods and services purchased by consumers – such as ration, rent, clothes, education etc.
When will the public get relief?
Even though the wholesale inflation rate has declined, its effect is seen at the retail level after some time. That is, it may take some time to fall in prices in the consumer market. However, it is an indication that the prices of essential commodities may be stable or softening in the near future.
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