Wholesale inflation eases to 2.47% on fall in food prices

Tribune News Service

New Delhi, April 16

Wholesale price inflation remained flat at 2.47% in March aided by a fall in food and mineral prices. On the basis of Wholesale Price Index (WPI), inflation was 2.48% in February and 5.11% in March last year. Food articles showed deflation at 0.29% in March as against 0.88% inflation in the preceding month.

Deflation in vegetables was 2.70%, pulses (20.58%) and wheat (1.19%) in March. Inflation in fuel and power basket, however, rose to 4.70% in March from 3.81% in the previous month.

Aditi Nayar, Principal Economist, ICRA, said the rise in global crude petroleum and natural gas prices and the recent depreciation of the rupee relative to the US dollar are likely to push up the WPI inflation in April.

“However, the extent of pass through of higher crude oil prices to retail fuel prices, in light of whether the uptick is absorbed by the OMCs or cuts in excise/VAT are instituted by the Central or state governments, remains to be seen”, she said.

Sunil Kumar Sinha, Director, India Ratings, said inflation in the food article category which has been declining since November turned into deflation in March mainly driven by the sharp correction in the prices of fruits and vegetable.