India's wholesale price inflation rises to 3.59 per cent

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Daily grocery bills have been rising in the past few months, and are likely to get even dearer, as wholesale inflation or Wholesale Price Index (WPI) touched six-month high of 3.59 percent in October as against 2.60 percent in September.

Data released by the commerce and industry ministry on Tuesday showed inflation, measured by the wholesale price index (WPI), rose an annual 3.6% in October, higher than the previous month's rise of 2.6% and 1.3% increase in October 2016.

"The broad-based and rather unseasonal spike in vegetable prices was the chief factor that pushed up the primary food inflation to 4.3% in October", Moneycontrol quoted ICRA's Principal Economist Aditi Nayar as saying.

"Build up inflation rate in the financial year so far was 2.03 per cent compared to a build up rate of 3.53 per cent in the corresponding period of the previous year".

However, inflation in manufactured products saw a slight dip to 2.62 percent, as against 2.72 percent in September. Meanwhile, inflation of non-food items (all commodities excluding food items) moved up to 3.7% in October 2017 from 2.9% in September 2017.

Inflation rate for the "non-food articles" group declined by 0.9 per cent due to lower prices of raw cotton, fodder, mesta, cotton seed, raw rubber, safflower (kardi seed), castor seed, raw hides, raw jute, gingelly seed, guar seed and groundnut seed.

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This comes when data released on Monday showed that retail inflation in October also rose to a 7-month high of 3.58 per cent due to costlier food items, especially vegetables. However, the price of manufacture of knitted and crocheted fabrics (2 per cent) and synthetic yarn (1 per cent) moved up.

Fuel and power prices accelerated by 10.52 per cent.

For the "electricity" group it rose 4 per cent due to higher price of electricity.

The Consumer Price Index (CPI) based inflation was 3.28 percent in September.

"Some abatement in prices of pulses, potato and sugar through policy measures is very much appreciated; similarly, policymakers should check and address prices of products including paddy that are hovering at higher levels and are also of national importance", said Rawat. The increase was led by firming up of food prices with vegetables segment remaining a key stress point at this juncture.

"Ficci would like to reiterate that under the present scenario inflation targeting by the central bank may not be the best approach".