WPI inflation touches 7-month high of 1.32% in September

The wholesale price-based inflation in India rose the most in seven months, climbing 1.32 per cent in September as compared to 0.33 per cent during the corresponding month of the previous year. The Wholesale price index-based (WPI) inflation had remained negative for four months -- April (-) 1.57 per cent, May (-) 3.37 per cent, June (-) 1.81 per cent and July (-) 0.25 per cent -- as coronavirus induced lockdown hurt economic activity. It climbed 0.16 per cent in August as manufactured products turned costlier. The WPI inflation was 0.42 per cent in March.

"The annual rate of inflation, based on monthly WPI, stood at 1.32% (provisional) for the month of September, 2020 (over September, 2019) as compared to 0.33% during the corresponding month of the previous year," the commerce and industry ministry said in a statement on Wednesday.

Also read: Retail inflation jumps to 7.34% in September, stays above RBI's comfort zone

The index for primary articles increased by 2.73% to 150.3 (provisional) in September from 146.3 in August. Prices of food articles (3.70% rise), crude petroleum & natural gas (1.41%) and minerals (0.12%) also increased as compared to August. Prices of non-food articles (-0.94%) declined in September as compared to August.

The index for fuel and power declined by (-0.44%) to 91.0 in September from 91.4 in August. The prices in this group -- Mineral Oils (-0.64%) -- declined as compared to August. Prices of coal and electricity remained unchanged. The index of manufactured products rose 0.42% to 119.8 in September from 119.3% in August.

In keeping with the market expectations, the Reserve Bank of India's newly-formed Monetary Policy Committee (MPC) decided to keep key lending repo rate unchanged at 4 per cent. Retail inflation jumped to 7.34 per cent in September, mainly on account of higher food prices, official data showed this week. It's the highest level of inflation which has been recorded since January this year. The rate of price rise in the food basket was 10.68 per cent in September compared to 9.05 per cent in August.

Also read: Retail inflation jumps to 7.34% in September, stays above RBI's comfort zone