Source: Business Standard, Dec 15, 2017
New Delhi: Inflation based on wholesale prices accelerated to an eight-month high of 3.93 per cent in November due to a sharp rise in onion prices and costlier seasonal vegetables, government data showed on Thursday. Calculated on wholesale price index (WPI), the inflation was 3.59 per cent in October this year, and 1.82 per cent in November last year.
The November figure is the highest so far this fiscal year (FY18) and the previous high was when the WPI touched 3.85 per cent in April.
Kitchen staple onion witnessed a whopping 178.19 per cent inflation last month. For seasonal vegetables, too, the rate of price rise in November was high at 59.80 per cent, against 36.61 per cent inflation in October.
The latest data comes within days of retail inflation, based on consumer price index, or CPI, touching a 15-month high of 4.88 per cent in November.
The Reserve Bank of India had warned last week that there may be a spike in prices in the coming months.
The WPI data, however, revealed that inflation in case of protein-rich eggs, meat, and fish slowed to 4.73 per cent in November, against 5.76 in the preceding month. Inflation in the overall food basket (including manufactured items) increased from 3.23 per cent in October to 4.1 per cent in November.
Industry body Assocham said the continuous increase in petrol and high-speed diesel prices due to rise in global crude oil rates has to be taken care of by policymakers as it may impact import bill and, subsequently, exchange rates.
“And it may have negative impact on input prices for the industry which has already started to feel the pressure on its profitability,” it said.Inflation in the fuel and power segment was recorded at 8.82 per cent last month, against 2.11 per cent a year ago. In October this year, it was 10.5 per cent.
CARE Ratings said the upside risks to inflation could emerge from lower rabi crop, as area under cultivation is smaller than last year.