The Wholesale Price Index (WPI) remained in the negative territory for the 15th straight month in January this year at (-) 0.90 per cent, a tad higher than (-) 0.95 per cent in the same month last year.
Softening food articles inflation, fuel price cuts and subdued global commodity prices weighed on the January WPI, which contracted further from a December 2015 level of (-) 0.73 per cent.
The November WPI print has been revised to (-) 2.04 per cent from (-) 1.99 per cent earlier.
Food articles inflation — which had weightage of about 15 per cent in WPI — cooled down to 6.02 per cent from 8.17 per cent last month. This latest reading of food articles inflation was lower than the retail food inflation for the month under review.
Notwithstanding some correction relative to the previous month, inflation for pulses, vegetables and spices remained uncomfortably high in January 2016, said Aditi Nayar, Senior Economist, ICRA. “We anticipate that WPI inflation will print a tad below zero in February 2016 barring a sizable uptick in crude oil prices in the remainder of this month”, she said.
For the month under review, fuel inflation came in at (-) 9.21 per cent, cereals at 1.24 per cent, vegetables 12.52 per cent and pulses at 44.91 per cent. Manufactured products inflation for January 2016 came in at (-) 1.17 per cent as against 1.05 per cent in same month last year. It has been in negative territory for the fifth straight month.
Industry view Reacting to the latest WPI print, apex industry chambers urged the RBI to continue with its benign monetary policy stance.
“The moderate inflation scenario should induce the RBI to continue with a benign monetary policy,” Chandrajit Banerjee, Director-General, Confederation of Indian Industry (CII) said in a statement here. Assocham President Sunil Kanoria said, in a statement, that the Reserve Bank of India should cut its benchmark interest rates in its next bi-monthly monetary policy since inflation as targeted by the apex bank is well within the range. This has created room for further rate cut to support demand in India, he said.