What Is Inflation?
- Inflation is a general and sustained increase in overall price level of goods and services.
- The inflation rate is a key parameter basis which government proposes its monetary and fiscal policy.
Wholesale Price Index Vs Consumer Price Index
- WPI is an indicator of price changes in the wholesale market.
- It calculates the price paid by the manufacturers and wholesalers in the market.
- CPI is a price index which represents the average price of a basket of goods over time.
- It calculates the average price paid by the consumer to the shopkeepers.
- The wholesale price index is measured by changes happening in three broad sectors –
Primary articles, fuel and power and manufactured products.
22.62% 13.15% 64.23%
- India’s wholesale inflation fell to the lowest in more than four years.
- The Wholesale Price Index fell 3.21% in May on an annual basis, the most since November 2015, after an increase of 42% in March,
- According to a media statement released by the Ministry of Commerce and Industry.
- Primary articles inflation fell to -2.92% in May.
- Fuel and power inflation was at -19.83%.
- For manufacturing articles, inflation fell to -0.42%.
- Food articles inflation stood at 13%.
- Among food articles, wholesale prices of vegetables fell 12.48% in May.
- Non-food articles inflation was at -3.53%.
Why wholesale inflation is a worry?
- Wholesale price index is the one that determines increment in your salary.
- If consumption is less (demand is low)
- Wholesale inflation remains low because the manufacturers cannot increase prices of products.
- Force manufacturers to announce DISCOUNTS to clear their stock.
- This means factories or manufacturers are not earning more.
- No increment to your salaries.
- May even cut down on job