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WPI inflation

WPI inflation

  • The Office of Economic Adviser, Department for Promotion of Industry and Internal Trade has released index numbers of wholesale price in India for the month of June 2021.
  • WPI inflation remained in double-digit for the third consecutive month in June, mainly due to a low base of last year.

Key points:

  • The annual rate of inflation is 12.07% for the month of June 2021 as compared to 1.81% in June 2020.
  • The index for Primary Articles increased by 0.86 % to 151.8 in June 2021.
  • Prices of non-food articles (2.55%); crude petroleum & natural gas (2.33 %); minerals (0.98%) and food articles (0.31%) increased in June 2021 compared to May 2021.
  • For fuel and power, it increased by 2.90 % to 113.7 in June, 2021 compared to May.
  • In manufactured products, inflation stood at 10.88 per cent in June, against 10.83 per cent in the previous month.
  • Inflation in food articles too eased to 3.09 per cent in June, from 4.31 per cent May.
  • The high rate of inflation in June 2021, is primarily due to low base effect and rise in prices of mineral oils viz petrol, diesel (HSD), naphtha, ATF, furnace oil etc, and manufactured products like basic metal, food products, chemical products etc as compared the corresponding month of the previous year

WPI:

  • It is an index that measures and tracks the changes in the price of goods in the stages before the retail level.
  • WPI is used as a measure of inflation in some economies.
  • WPI includes three components viz,
  • Manufactured products - 64.2%
  • Primary articles - 22.6%
  • Fuel and power - 13.1%
  • The base year for the WPI: 2011-12.
  • The number of items covered in the WPI is 697.
  • The index is released by the Economic Advisor in the Ministry of Commerce and Industry.
  • Provisional figures of WPI are released on the 14th of every month (or next working day) with a time lag of two weeks of the reference month based on data compiled from institutional sources and selected manufacturing units across the country.
  • After 10 weeks, the index is finalized and final figures are released.
  • WPI captures the average movement of wholesale prices of goods and is primarily used as a GDP deflator.

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