The Wholesale Inflation Rate (WPI) has come down to 3.85% in February. This is the lowest level in 25 months. The wholesale inflation rate in January 2023 was 4.73%. In December, the wholesale inflation rate was 4.95%. Due to the less price of items like potato, onion, fuel, there has been a decline in inflation. It was 4.83% in February 2021 and 2.03% in January 2021.
Earlier on Monday, retail inflation data was released, according to which the retail inflation rate has come down to 6.44% in February 2023.
- Food inflation has come down from 2.95% to 2.76%.
- Inflation in vegetables has increased from -26.48% to -21.53%.
- Inflation in eggs, meat and fish declined from 2.23% to 1.49%.
- Onion inflation has come down from -25.20 to -40.14%.
- Potato inflation has come down from 9.78% to -14.30%.
- The WPI in Fuel & Power declined from 15.15% to 14.82%.
Impact of WPI on common man
The prolonged increase in WPI is a matter of concern. It mostly affects the productive sector. If the wholesale price remains high for too long, producers pass it on to consumers. Government can control WPI only through tax.
For example, in the event of a sharp rise in crude oil, the government had cut excise duty on fuel. However, the government can deduct tax within a limit, because it also has to pay for wages, development works etc. In WPI, more weightage is given to factory goods like metal, chemical, plastic, rubber.
Retail inflation eased
Yesterday, the retail inflation figures for the month of February were released. Retail inflation has come down to 6.44% in February. It was 6.52% in January 2023 and 5.72% in December 2022.
