Wholesale inflation declined marginally to 9.78% in July. A month ago in June, the WPI inflation rate was 9.87%. The rate for July was 0.09% lower than that of June. Increase in primary articles and manufactured products, softening from fuel group 1. Raw goods and food items (Primary Articles) 2. Fuel and electricity (Fuel and Power) 3. Goods made in factories (Manufactured Products) 4 parts of wholesale inflation Primary article, whose weightage is 22.62%. The weightage of Fuel and Power is 13.15% and the weightage of Manufactured Products is the highest at 64.23%. The primary article also has four parts. Impact of Wholesale Price Index (WPI) on the common man: Prolonged increase in wholesale inflation has a negative impact on most of the productive sectors. If wholesale prices remain high for too long, producers pass the burden on to consumers. Government can control WPI only through tax. For example, in the event of a sharp increase in crude oil, the government had reduced the excise duty on fuel. However, the government can reduce tax cuts only within a limit. In WPI, more weightage is given to factory related goods like metal, chemical, plastic, rubber. How is inflation measured? There are two types of inflation in India. One is retail and the other is wholesale inflation. Retail inflation rate is based on the prices paid by ordinary consumers. It is also called Consumer Price Index (CPI). Whereas, Wholesale Price Index (WPI) means the prices that one trader charges from another trader in the wholesale market. Different items are included to measure inflation. For example, the share of manufactured products in wholesale inflation is 63.75%, primary articles like food 22.62% and fuel and power 13.15%. At the same time, the share of food and products in retail inflation is 45.86%, housing is 10.07% and other items including fuel also have a share.
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