New Delhi, May 15: Wholesale inflation dropped to a two-month low of 5.2 per cent because of the easing of prices of vegetables and fuel in April. However, prospects of a below-average monsoon could flare up prices and pose a challenge to the new government.
“We are encouraged that the inflation numbers are coming down. On the whole at the moment, it appears that we are on track as far as inflation is concerned...(it is) something to smile about,” finance secretary Arvind Mayaram said.
According to data released today, WPI (wholesale price index) in the overall food segment eased to 8.64 per cent in April from a high of 9.9 per cent in March.
WPI data further showed easing inflation in fuel, power and manufactured items segments, which include sugar and edible oils. The rate of price rise in the fuel and power segment was 8.93 per cent against 11.22 per cent in March.
Wholesale inflation stood at 5.7 per cent in March.
Mayaram hoped that “as we go forward in the current financial year, inflation numbers will be moderating further”.
He, however, sounded caution on the possible deficiency in monsoon because of the El Nino effect.
“We believe we need to be cautious and alert. But we have adequate stocks of foodgrains to meet any eventuality. And therefore, I do not believe that a slightly sluggish monsoon is going to really impact the supply chain in a manner that will be disruptive,” he said.
Inflation based on the consumer price index (CPI), on the other hand, had shot up to a three-month high of 5.59 per cent in April.
On retail inflation, Mayaram said during the elections, the CPI generally inches up. “There is a lot of expenditure that happens. So obviously, there is a lot of liquidity in the market. So we should not take this number as something to worry about,” the secretary said.