Wholesale inflation increased to 2.37% in December: Prices of onion, potatoes, eggs, meat, fish and fruits increased, was 1.89% in November.

Wholesale inflation has increased to 2.37% in the month of December. Earlier in November, wholesale inflation was at 1.89%. In the month of October it was at 2.36%. Wholesale prices of onions, potatoes, eggs, meat, fish and fruits have increased. These figures have been released by the Ministry of Commerce and Industry.

Daily use items became expensive, food items became cheaper

Impact of Wholesale Price Index (WPI) on the common man

Prolonged increase in wholesale inflation has a negative impact on most 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 situation of 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.

Three 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:

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). At the same time, Wholesale Price Index (WPI) means the prices that one businessman charges from another businessman 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.