India's wholesale inflation remained in the negative zone for the sixth straight month through September, according to official data on Monday. Wholesale inflation is based on the Wholesale Price Index.
It had first gone into negative territory in April this year. Prior to that, the WPI was reported to be negative during the initial days of Covid-19 pandemic in July 2020.
The wholesale inflation in September was around (-) 0.26 per cent against (-) 0.52 per cent in August and (-) 1.23 in July, data released by the ministry of commerce and industry highlighted.
Deflation in the month of September is mainly due to the fall in prices of chemicals and chemical products, mineral oils, textiles, basic metals and food products as compared to the corresponding month of the previous year.
The WPI data has come following the comments of the statistics ministry on October 12 that headline retail inflation had fallen to a three-month low of 5.02 per cent in September.
The index numbers of wholesale prices is released by the government on a monthly basis on the 14th of every month (or the next working day). The index numbers are compiled with the data received from the institutional sources and selected manufacturing units across the country.
It may be noted that the overall wholesale inflation was 8.39 per cent in October 2022 and has fallen since then. Notably, the wholesale price index (WPI)--based inflation had been in double digits for 18 months in a row till September last year.
Meanwhile, the retail inflation in India is again back in RBI 2-6 per cent comfort level in September but is above the ideal 4 per cent scenario. September retail inflation was at 5.02 per cent.
Barring the recent pauses, the RBI has raised the repo rate by 250 basis points cumulatively since May 2022 in the fight against inflation. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.