As per the data released on February 14, 2011 the wholesale price index (WPI) eased marginally in January from the month before, but the slow pace of decline and signs that it was becoming broad-based have been cause of concern for the Reserve Bank of India.
The wholesale price index (WPI) rose 8.23% in January from a year earlier. The figure is a bit lower on month on month basis as index stood at 8.43% in December from a year earlier.
The annual reading for November was upwardly revised to 8.08% from 7.48%.
The slight drop has come as prices of some manufactured products have moderated. However, Food prices in the WPI index jumped 15.7% in January compared with 13.6% in December.
The main worry in food products is supply side which coupled with record high global food prices and surging crude prices, is putting inflationary pressures.
Wholesale price-based inflation moderated to 8.23% in January from 8.43% a month earlier, despite food inflation rising over 2% points, as softening of prices took place only late last month.
In near term, the government is expecting some easing in food prices and the inflation target for year end March 2011 target is projected at 7 per cent.
The WPI is more closely watched than the consumer price index (CPI) in India as it covers a higher number of products.
Last Update Saturday 19th February 2011