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Retail inflation rises to 5.49% in September: 9-month high, inflation boosted by rise in vegetable prices

Retail inflation rose to 5.49% in September due to bad weather and expensive vegetables. In August it was 3.65%. This is the highest level in 9 months.

At the same time, the food inflation rate increased from 5.66% to 9.24%. Urban inflation also rose to 5.05% from 3.14% on a month-on-month basis. Rural inflation increased from 4.16% to 5.87%.

Food inflation was 5.66% in September 2023, now down to 9.24% Food items contribute about 50% to the inflation basket. Its inflation rose to 9.24% from 5.66% on a month-on-month basis. While a year ago in August 2023, food inflation was 6.62%. That means it has increased on an annual basis as well.

Impact of WPI on Common Person Prolonged increases in wholesale inflation have a negative impact on most productive sectors. If wholesale prices remain high for a long time, producers pass the burden on to consumers. Government can control WPI only through tax.

For example, in the face of sharp rise in crude oil, the government reduced the excise duty on fuel. However, the government can reduce taxes only within a limit. In WPI, more weightage is given to factory related goods like metal, chemical, plastic, rubber.

There are three parts of wholesale inflation: A primary article which has a weightage of 22.62%. Fuel and power has a weightage of 13.15% and manufactured products have the highest weightage of 64.23%. The primary article also has four parts:

How is inflation measured? There are two types of inflation in India. One is retail i.e. retail and the other is wholesale inflation. The rate of retail inflation is based on the prices paid by ordinary consumers. It is also called Consumer Price Index (CPI). At the same time, Wholesale Price Index (WPI) means what one trader charges from another trader in the wholesale market.

Various items are included to measure inflation. For example, manufactured goods accounted for 63.75% of wholesale inflation, primary items such as food accounted for 22.62% and fuel and power accounted for 13.15%. At the same time, food and products accounted for 45.86% of retail inflation, housing accounted for 10.07% and other items including fuel also contributed.

RBI had pegged retail inflation at 4.5% for this financial year During the recently held monetary policy committee meeting, the RBI kept its inflation forecast unchanged at 4.5% for this financial year. RBI Governor said – Inflation is coming down, but progress is slow and uneven. India's inflation and growth path is moving in a balanced manner, but it is important to remain vigilant to ensure that inflation remains on target.

Wholesale inflation rises to 1.84% in September: Vegetables and food items cost more, from 1.31% in August

Wholesale inflation rose to 1.84% in the month of September. Earlier, wholesale inflation eased to 1.31% in August. In July it was 2.04%. Inflation has increased due to increase in prices of vegetables and food items. Click to read more…

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Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).

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