Wholesale inflation rises to 5.7% in March

The wholesale price index (WPI), which captures producers’ inflation in the country and till recently was the main factor dictating monetary policy in the country, rose 5.7 per cent last month over the year-ago period. Although provisional, this marks an increase compared with 4.68 per cent inflation in February (over February 2013) as also a 5.65 per cent rise in WPI during March 2013 over the year-ago period.

This takes the build-up inflation rate in the financial year to 5.7 per cent compared with a build-up rate of 5.65 per cent in the corresponding period of the previous year.

The rise in inflation was led by fuel & light category, which comprises just 15 per cent of the overall index but rose over 11 per cent due to a rise in prices of diesel and LPG.

Moreover, primary articles, which constitute a fifth of the overall index, rose 7.66 per cent due to an increase in prices of foods such as potato, fruits and cereals, including rice.

Prices of manufactured products, which comprise almost two-thirds of the WPI, however, remained subdued with just a 3.23 per cent rise in March.

Meanwhile, the final revised estimate of wholesale inflation for January has now been pegged at 5.17 per cent compared with a 5.05 per cent in the provisional estimate.

Early this month, RBI had left the key policy rates unchanged as it said it intends to see the rate increases undertaken during September 2013-January 2014 to work their way through the economy.

RBI has said in the past it plans to link the policy rates to targeting consumer inflation and has a central forecast of 8 per cent consumer inflation by January 2015.

(Edited by Joby Puthuparampil Johnson)

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