India's wholesale inflation continued to be in the negative terrain for the fourth consecutive month. The wholesale price index (WPI) rose to -1.36% in July as against -4.12% in June owing to an increase in food prices, according to the ministry of commerce & industry. The WPI index in May stood at -3.48%.
The decline in the rate of inflation in July is primarily contributed by the fall in prices of mineral oils, basic metals, chemical & chemical products, textiles and food products, says the ministry.
Wholesale inflation by primary articles stood at 7.57% in July as against -2.87% in June. "The index for this major group increased by 8.05% to 190.5 (provisional) in July 2023 from 176.3 (provisional) for the month of June. Prices of food articles (10.55%), crude petroleum & natural gas (4.40%) and non-food articles (2.27%) increased in July as compared to June. Prices of minerals (-3.17%) declined in July as compared to June," says the ministry.
Wholesale inflation in the fuel and power basket declined marginally from -12.63% in June to -12.79% in July. While prices of coal (0.7%) increased in July as compared to June, prices of electricity (-0.45%) and mineral oils (-0.65%) declined in July as compared to June.
Whole inflation for the manufacturing products stood at -2.51% in July as against -2.71% in June. "The index for this major group declined by 0.29% to 139.6 (provisional) in July from 140.0 (provisional) for the month of June. Out of the 22 NIC two-digit groups for manufactured products, 11 groups have witnessed an increase in prices whereas 10 groups have witnessed a decrease in prices. The increase in price is mainly contributed by food products; machinery & equipment; computer, electronic & optical products; other non-metallic mineral products and electrical equipment etc. Some of the groups that have witnessed a decrease in prices are basic metals; chemical and chemical products; textiles; other manufacturing; paper & paper products etc. in July as compared to June," says the ministry.
The government is yet to announce the data for retail inflation.
Notably, the Reserve Bank of India Shaktikanta Das, last week, cautioned that a substantial increase in headline inflation would occur in the near term led by the recent spike in prices of tomatoes, cereals and pulses.
"The month of July has witnessed an accentuation of food inflation, primarily on account of vegetables. The spike in tomato prices and a further increase in prices of cereals and pulses have contributed to this. Consequently, a substantial increase in headline inflation would occur in the near term," said Das.
Earlier this month, the ministry of finance said that the RBI and the central government continue to maintain a guarded approach for appropriate and timely policy response, amidst the rising food prices in the country.