New Delhi: The government has suffered a major setback on the wholesale price inflation front. Inflation based on wholesale prices rose to a record high of 12.94 per cent in May, driven by rise in crude oil and manufactured goods prices. WPI inflation has also risen sharply in May 2021 due to the lower base effect. WPI inflation in May 2020 was negative 3.37 per cent. According to a CNBC-TV18 poll, it was estimated to be at 13.61 per cent. On a month-on-month basis, the March revised WPI stood at 7.89 per cent from 7.39 per cent.
This is the fifth consecutive month that inflation based on the Wholesale Price Index (WPI) has increased. In April 2021, WPI inflation was in double digits to 10.49 percent. “The annual rate of inflation based on monthly WPI has increased to 12.94 per cent in May 2021 (as compared to May, 2020) from negative 3.37 per cent in May 2020,” the commerce ministry said in a statement.
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According to the statement, “The higher rate of inflation in May 2021 is mainly due to lower base effect and increase in the prices of petroleum products and manufactured products like petrol, diesel, naphtha, furnace oil etc. as compared to the corresponding month of last year. ”electricity inflation rises
Inflation in fuel and power rose to 37.61 per cent during the period under review, from 20.94 per cent in April. Inflation in manufactured products stood at 10.83 per cent in May as against 9.01 per cent in the previous month. Food inflation eased marginally to 4.31 per cent in May. However, onions became expensive during this period.
Keeping interest rates low in monetary policy
RBI in its monetary policy earlier this month kept interest rates at a record low and said it was committed to maintain a lenient policy to boost growth.
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Petrol-diesel, fast on food items
During this period, there has been an increase of 12.09 percent in pulses, 23.24 percent in onions, 20.17 percent in fruits, 35.94 percent in oilseeds and 102.51 percent in crude petroleum. During this, there has been a tremendous increase of 62.28 percent in the price of petrol, 66.3 percent in diesel and 51.71 percent in the price of vegetables.