India's Wholesale Inflation Remains Steady at 2.38% in February
India’s wholesale inflation rate witnessed a slight increase in February 2024, settling at 2.38%, as per data released by the Ministry of Commerce on Monday. This figure is marginally higher than January’s wholesale inflation rate of 2.31%. The rise in manufactured food products, textiles, and non-food articles contributed to the inflationary pressure. However, a decline in the Food Index brought some relief.
Wholesale inflation is measured using the Wholesale Price Index (WPI), which tracks the price movement of goods at the wholesale level before they reach consumers. Unlike Consumer Price Index (CPI)-based inflation, which reflects retail prices, WPI captures inflation trends in the manufacturing and wholesale sector.
The WPI is crucial for policymakers, businesses, and analysts as it provides insights into cost pressures within industries and serves as a leading indicator for future retail inflation.
The inflation rate was influenced by an increase in the prices of:
Despite inflationary pressures in certain categories, food price inflation eased in February. Vegetables, fruits, edible oils, and fats saw some price correction, bringing down the overall Food Index from 7.47% to 5.94%.
The Reserve Bank of India (RBI) plays a crucial role in controlling inflation through monetary policy tools.
Category | Details |
---|---|
Why in News? | India’s WPI inflation rose slightly to 2.38% in February 2024, up from 2.31% in January. |
Key Contributors | Higher prices of manufactured food products, textiles, and non-food articles. |
Food Index Trend | Declined from 7.47% in January to 5.94% in February, easing food price pressures. |
WPI Historical Trend | Double-digit inflation for 18 months until September 2022; turned negative in April 2023. |
RBI’s Monetary Policy | Repo rate reduced by 25 basis points to support growth and consumption. |
Impact on Economy | Encourages manufacturing production but may increase consumer prices. |
Government Measures | Monthly publication of WPI inflation data to guide economic policies. |
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