Winning Bizness Desk
Mumbai. December 2022 saw a major decline in the Wholesale Inflation (WPI) rate. According to the government data released today i.e. on Monday, the Wholesale Price-Based Inflation (WPI) has come down to 4.95%, while in November 2022, it was at 5.85%. This is its 22-month low. Earlier in February 2021, the inflation rate was lower at 4.83% and in the last year in November 2021, WPI was 14.27%. The main reason for the decline in WPI is the decline in food inflation, which has come down to a 22-month low of 0.65%, while food inflation was at 2.17% in November 2022. On the other hand, the food index has come down to 1.8% month-on-month.
Govt can control WPI only through tax
The prolonged increase in WPI is a matter of concern which mostly affects the productive sector. If the wholesale price remains high for too long, producers pass it on to consumers. Government can control WPI only through tax. For example, in the event of a sharp rise in crude oil, the government had cut excise duty on fuel. However, the government can deduct tax within a limit, because it also has to pay salary. In WPI, more weightage is given to factory goods like metal, chemical, plastic, rubber.
prices of food items, mineral oils went down
The Ministry of Commerce and Industry said in a statement that in December 2022, the inflation of food items was negative 1.25 percent and the inflation of fuel and electricity was 18.09 percent. Inflation in manufactured products was 3.37 percent in the month under review. According to the statement, the decline in the rate of inflation in December 2022 was mainly due to the fall in the prices of food items, mineral oils, crude oil and natural gas, food products, textiles and chemicals and chemical products.