WPI Contracts By 3.21% Why Its Worry For Economy – Free PDF

What Is Inflation?

• Inflation is a general and sustained increase in overall price level of goods and services.
• The inflation rate is a key parameter basis which government proposes its monetary and fiscal policy.

Wholesale Price Index Vs Consumer Price Index

• WPI is an indicator of price changes in the wholesale market.
• It calculates the price paid by the manufacturers and wholesalers in the market.
• CPI is a price index which represents the average price of a basket of goods over time.
• It calculates the average price paid by the consumer to the shopkeepers.

Different Categories

• The wholesale price index is measured by changes happening in three broad sectors –

Primary articles, fuel and power and manufactured products.
22.62%              13.15%                 64.23%

• India’s wholesale inflation fell to the lowest in more than four years.
• The Wholesale Price Index fell 3.21% in May on an annual basis, the most since November 2015, after an increase of 42% in March,
• According to a media statement released by the Ministry of Commerce and Industry.

• Primary articles inflation fell to -2.92% in May.
• Fuel and power inflation was at -19.83%.
• For manufacturing articles, inflation fell to -0.42%.
• Food articles inflation stood at 13%.
• Among food articles, wholesale prices of vegetables fell 12.48% in May.
• Non-food articles inflation was at -3.53%.

Why wholesale inflation is a worry?

• Wholesale price index is the one that determines increment in your salary.
• If consumption is less (demand is low)
• Wholesale inflation remains low because the manufacturers cannot increase prices of products.
• Force manufacturers to announce DISCOUNTS to clear their stock.
• This means factories or manufacturers are not earning more.
• No increment to your salaries.
• May even cut down on job

Conclusion

Latest Burning Issues | Free PDF

Sharing is caring!