India’s inflation based on wholesale price index (WPI) in April increased at a positive rate of 1.26 per cent year on year, when it was 0.8% in April 2023, driven by fuel and power, WPI-food (primary food + manufactured food) and core-WPI (manufactured non-food products) groups, rising to a 13 month high, pushed by increase in prices of food articles, electricity, crude petroleum and natural gas, manufacture of food products, other manufacturing etc.
The April WPI rose from 0.5 per cent in March 2024. The month over month change in WPI index for the month of April 2024 stood at 0.79 per cent as compared to March 2024, provisional data released by the Commerce Ministry showed on Tuesday. The WPI inflation eased marginally to 0.2 per cent in February 2024 from 0.3 per cent in January 2024, partly led by the decline in the inflation for minerals as well as the wider YoY deflation in core-WPI and fuel and power in Feb 2024 vs. Jan 2024. Rating agency ICRA had forecast that WPI inflation will rise in March 2024, crossing the 1.0 per cent mark after a gap of 11 months, amid the ongoing uptick in international prices of crude oil and other commodities, as well as an unfavourable base (+1.4 per cent in March 2023.
The food Index consisting of ‘food articles’ from primary articles group and ‘food product’ from manufactured products group have increased from 180.1 in March, 2024 to 183.6 in April, 2024. The rate of inflation based on WPI food index increased from 4.65 per cent in March 2024 to 5.52 per cent in April, 2024.
The index for primary articles, a major group, increased by 1.97 per cent to 186.7 in April, 2024 from 183.1 for the month of March, 2024. Prices of crude petroleum and natural gas increased 3.56 per cent and that of food articles increased 2.67 per cent as compared to March, 2024. Prices of non-food articles fell 1.19 per cent and minerals fell by 1.55 per cent in April, 2024 as compared to March, 2024. The index for fuel and power declined by 0.26 per cent to 154.8 in April, 2024 from 155.2 in March, 2024. Prices of mineral oils rose 0.06 per cent in April, 2024 as compared to March, 2024. Prices of electricity decreased 1.20 per cent in April, 2024 as compared to March, 2024.
Index for another major group, manufactured products increased by 0.50 per cent to 140.8 in April, 2024 from 140.1 for the month of March, 2024. Some of the important groups that showed month-over-month increase in prices are basic metals, other manufacturing, textiles, food products, chemical and chemical products, etc. Some of the groups that witnessed a decrease in prices are other non-metallic mineral products, paper and paper products, motor vehicles, trailers and semi-trailers, furniture and leather and related products in April, 2024 as compared to March, 2024.
According to ICRA, the yoy WPI inflation hardened to 1.3 per cent in April 2024 contrasting with the slight easing in the CPI inflation in April 2024 vis-à-vis March 2024, thereby leading to a narrowing of the wedge between the WPI and CPI inflation. Going forward, ICRA projects the WPI inflation to harden further to 2.0-3.0 per cent in May 2024 compared to 3.6 per cent in May 2023) owing to an adverse base effect for crude oil and food items.
