Wholesale price inflation shatters 30-year record

The wholesale price index (WPI)-based price rise surged to a 30-year high of 12.96 per cent in FY22, on rising commodity prices and a low base of 1.3 per cent in FY21. The last time wholesale inflation touched such high levels was three decades ago – at 13.7 per cent in FY92 (on base year of 1981-82).

According to the latest data released by the commerce ministry earlier this week, WPI-based inflation stood at 14.5 per cent in March — a four-month high — compared with 7.89 per cent in the year-ago period. WPI inflation was 13.11 per cent in February this year.

March also saw consumer price index-based inflation rise to a 17-month high of 6.95 per cent.

“The high rate of inflation in March is primarily due to rise in prices of crude petroleum & natural gas, mineral oils, basic metals owing to disruption in the global supply chain caused by Russia-Ukraine conflict,” a government release read.

The month-over-month change in WPI for the fuel and power basket in March stood at 2.69 per cent compared to February, while that for manufactured products surged 2.31 per cent over the same period. Fuel & power and manufactured products formed 13.15 per cent and 64.23 per cent, respectively, of WPI.

The rate of inflation based on WPI food index rose from 8.47 per cent in February to 8.71 per cent in March.

“The surge is fairly broad based as primary articles, fuel and power and manufacturing recorded double-digit inflation in March 2022,” said Sunil Kumar Sinha, principal economist, India Ratings.

Fuel and power inflation, which was on a declining trajectory, reversed its course in March by increasing to 34.5 per cent against 31.5 per cent a month-ago.