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DEMONETIZATION: Wholesale Price Inflation falls to 3.15% in November

The annual rate of inflation, based on monthly WPI, stood at 3.15% for the month of November, 2016 as compared to 3.39% for the previous month and -2.04% during the corresponding month of the previous year.

The fall is largely expected due to the impact of the withdrawal of high-denomination currencies during the month.

Build up inflation rate in the financial year so far was 4.45% compared to a build up rate of 0.80% in the corresponding period of the previous year.

It was widely expected that the prices of key commodities, particularly, food items, would decline in the aftermath of the currency demonetization.

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The index for this major group declined by 0.9 percent to 259.4 from 261.8 for the previous month. The groups and items which showed variations during the month are as follows:-

The index for ‘Food Articles’ group declined by 1.0 percent to 276.1 (provisional) from 278.8 (provisional) for the previous month due to lower price of fruits & vegetables (7%), moong and masur (4% each), urad (3%), maize (2%) and arhar and condiments & spices (1% each).

This essentially means that food items became cheaper in November compared to October.

However, the price of ragi (20%), gram (10%), coffee (10%), wheat (5%), poultry chicken and barley (4% each) and bajra, fish-inland, tea, fish-marine, egg and jowar (1% each) moved up.

The index for ‘Non-Food Articles’ group declined by 0.8 percent to 221.4 (provisional) from 223.2 (provisional) for the previous month due to lower price of sunflower (11%), groundnut seed and guar seed (5% each), soyabean and flowers (4% each), linseed, raw cotton and mesta (3% each), coir fibre (2%) and raw wool, fodder, gingelly seed (1% each). However, the price of raw rubber (5%), sugarcane (4%), raw silk (3%), raw jute and castor seed (2% each) and copra (coconut), safflower (kardi seed) and rape & mustard seed (1% each) moved up.

The index for ‘Minerals’ group declined by 1.7 percent to 207.4 (provisional) from 210.9 (provisional) for the previous month due to lower price of magnesite (20%), copper ore (17%), chromite (5%) and phosphorite (2%). However, the price of manganese ore (10%), limestone (6%), iron ore (4%) and zinc concentrate (1%) moved up.

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