Headline inflation rate (provisional) based on Wholesale Price Index (WPI) for August, 2020 stood at 0.16% as compared to (-) 0.58% in the month of July, 2020: Ministry of Commerce & Industry
– ANI (@ANI) September 14, 2020
It was 1.17 percent in August 2019. The Reserve Bank of India did not change policy rates in the monetary review last month because of the risk of inflation going upwards.
Food inflation in August stood at 3.84 per cent. Potato prices increased by 82.93 percent. While inflation in vegetables was 7.03 per cent, onion was (-) 34.48 per cent. Talking about fuel and electricity, their inflation rate was 9.68 percent in August. However, inflation of manufactured products rose to 1.27 per cent during this period, from 0.51 per cent in July.
Inflation in India generally refers to inflation in commodity prices for some time in the markets. When the prices of goods or services in a country become high, it is called inflation. Purchasing power per unit decreases as the price of products increases. The decisions of financial and monetary policies are taken on the basis of the wholesale price index.
Retail inflation will come down in the coming days – CEA
Chief Economic Advisor (CEA) KV Subramaniam has expressed confidence that retail inflation will come down in the coming days after easing the lockdown. He said inflation has increased due to supply constraints. According to government data, retail inflation rose to 6.93 percent in July.
Retail inflation has increased mainly due to increase in prices of vegetables, pulses, meat and fish. However, WPI inflation declined 0.58 per cent in July. Subramaniam said that if you look at inflation, it is mainly due to supply side problems. However, these barriers will be overcome after the local lockdown is relaxed.
Subramanian told that overall wholesale and retail inflation is due to supply side factors. These problems will be overcome further. In such a situation, retail inflation will also soften. It is expected that retail inflation will remain at an elevated level for the rest of the year. With this, the Reserve Bank will no longer have room for policy rate cuts.
The six-member Monetary Policy Committee (MPC), headed by Reserve Bank Governor Shaktikanta Das, has been targeted to keep annual retail inflation at four per cent (up or down two per cent) by 31 March 2021. However, so far retail inflation has remained within the comfort zone of the Reserve Bank.