Wholesale price relief
Wholesale price inflation softened to 2.6 per cent in September as prices of food articles, led by vegetables, eased, prompting India Inc to pitch for a rate cut by the RBI to support demand.
- Published 17.10.17
New Delhi: Wholesale price inflation softened to 2.6 per cent in September as prices of food articles, led by vegetables, eased, prompting India Inc to pitch for a rate cut by the RBI to support demand.
Inflation, based on the wholesale price index (WPI), had soared to a four-month high of 3.24 per cent in August 2017. It was 1.36 per cent in September 2016.
The government data released today showed that inflation in food articles tapered to 2.04 per cent in September against 5.75 per cent in August on a yearly basis.
Vegetable prices fell to 15.48 per cent in September against a high of 44.91 per cent in the previous month.
"The correction in vegetable prices was the chief driver of the decline in primary food inflation to 2 per cent. A favourable base effect aided the moderation in inflation for fuel and power, despite the recent rise in prices of petrol, diesel, aviation turbine fuel and other fuels," said Aditi Nayar, principal economist at Icra.
"Given the moderation in CPI and WPI inflation, the RBI should resume the rate easing cycle in its next monetary policy to give a fillip to demand," Chandrajit Banerjee, director-general of the CII, said.