New Delhi, Dec. 16: Wholesale inflation soared to a 14-month high of 7.52 per cent in November, accentuating the need for a strong monetary policy response by the RBI on Wednesday.
The inflation number — measured by the wholesale price index (WPI) — comes on top of last Friday’s report that consumer inflation had jumped to 11.24 per cent. Bankers are now expecting a rate hike — the third since Raghuram Rajan took over as the governor of the RBI in September.
Inflation as measured by WPI is at the highest level since 8.1 per cent in September 2012. It stood at 7 per cent in October this year.
Vegetable prices shot up 95.25 per cent in November compared with a 78.38 per cent increase in October.
Inflation in the food segment, comprising wheat, pulses, vegetables and milk among others, was up at 19.93 per cent compared with 18.19 per cent in October.
Meanwhile, wholesale inflation for September was revised upwards to 7.05 per cent from the earlier estimate of 6.46 per cent.
The latest figures dashed hopes of a favourable monsoon slowing runaway inflation.
The inflation in fuel and power was at 11.08 per cent in the month under review, up from 10.33 per cent in October. The price rise in manufactured products rose to 2.64 per cent from 2.50 per cent.
Policymakers have been grappling with high prices of food articles even after the central bank raised interest rates by a quarter percentage point in each of its previous two reviews.
“Prices of vegetables remain unduly high and it is critical for India to implement measures to resolve supply side issues in this area. Several recommendations have been provided,” Ficci president Naina Lal Kidwai said.
Brokerage firm Angel Broking said it expected the RBI to hike the repo rate by 25 basis points in its December 18 policy review.
“Inflation should not come in the way of an accommodative monetary policy. High interest rates may only worsen the industrial slowdown without helping ease inflation,” CII director-general Chandrajit Banerjee said.