In a recent economic update from New Delhi, India has seen a small uptick in wholesale inflation, registering a 0.53 percent increase in March 2024. This represents a modest rise from the 0.20 percent reported in the previous month. The slight inflationary pressure has been primarily attributed to rising prices in key food items such as vegetables, potatoes, onions, as well as in the crude oil sector.
The Wholesale Price Index (WPI)-based inflation emerged from a period in the negative region, spanning from April to October, before transitioning to a positive figure in November at 0.26 percent. Comparatively, the previous year’s March inflation was registered at 1.41 percent. This marks a significant shift in the inflation landscape over the course of a year.
Presenting the latest figures, the commerce and industry ministry released a statement on Monday stating, “The annual rate of inflation based on all-India Wholesale Price Index (WPI) number is 0.53 percent (provisional) for the month of March, 2024 (over March, 2023).”
The data points to an uptick in food inflation, which climbed slightly to 6.88 percent this March, a jump from the 5.42 percent recorded in the same month the year prior. Specifically, inflation in the vegetable segment hit a substantial 19.52 percent, marking a stark contrast to the deflation of 2.39 percent seen in the prior year. These figures highlight the volatility in the agricultural sector, which can have a profound impact on both wholesale and retail prices.
A striking increase was noted in the inflation rates of staples such as potatoes and onions. WPI for potatoes surged by an eye-opening 52.96 percent, reversing a prior deflation of 25.59 percent. For onions, the inflation rate soared to 56.99 percent compared to a substantial deflation of 36.83 percent in March 2023. These substantial shifts underline the variations within the food market which can ripple through the economy.
The oil sector was not immune to inflationary pressures either. The data indicated that the inflation in the crude petroleum segment rose by 10.26 percent in March, contrasting with the deflation of 23.53 percent in the same month the previous year. This increase has been largely ascribed to the strengthening of global crude oil prices.
However, on the retail front, inflation told a different story, presenting a more relieving picture for consumers. Retail inflation dropped to a five-month low of 4.85 percent in March, significantly aided by diminishing food prices. The Consumer Price Index (CPI) based retail inflation had been higher in February at 5.09 percent and in March 2023 at 5.66 percent. The recent dip to 4.85 percent is a continuation of the trend seen last October, when CPI-based inflation registered at its lowest of 4.87 percent for the period.
The National Statistical Office (NSO) shed light on the inflation in the food basket, which was reported at 8.52 percent in March, marginally down from 8.66 percent the previous month. These figures reflect subtle fluctuations in the cost of food, which forms a significant component of the average consumer’s spending.
In summary, while India’s wholesale inflation saw a minor increase in March 2024, the cooling of food prices played a crucial role in bringing down retail inflation to a more manageable rate, offering a mixed bag of economic indicators. As the global and domestic economic landscapes continue to evolve, these indices serve as vital gauges for policymakers, businesses, and consumers alike.
