A massive contraction in food prices dragged India’a annual rate of inflation which is based on the wholesale prices to record the lower levels of 0.90 percent in June as per the official date showed on Friday. According to data from the Ministry of Commerce and Industry, the wholesale price index (WPI), with the revised base year of 2011-12, decelerated further in June to 0.90 per cent from 2.17 per cent in May as food prices eased.
“The annual rate of inflation, based on monthly WPI, stood at 0.90 per cent (provisional) for June 2017 (over June 2016) as compared to 2.17 per cent (provisional) for the previous month and (-) 0.09 per cent during the corresponding month of the previous year,” the Ministry said. “Build up inflation rate in the financial year so far was (-) 0.44 per cent compared to a build up rate of 3.71 per cent in the corresponding period of the previous year.”
The wholesale prices had decelerated in May to 2.17 per cent from 3.85 per cent reported for April. However, the WPI in June 2016 declined to (-) 0.09 per cent.The base year of the current WPI, which was revised in June from 2004-05 to 2011-12, does not include indirect taxes, thus, decreasing volatility in inflation at wholesale level.
On a year-on-year (YoY) basis, expenses on primary articles, which constitute 22.62 per cent of the WPI’s total weightage, declined by (-) 3.86 per cent as compared to a rise of 5.68 per cent during the same month a year ago.The prices of food articles slipped by (-)3.47 per cent during the month under review.The wholesale inflation rate for onion was lower year-on-year by (-) 9.47 per cent, while that for potatoes plunged by (-) 47.32 per cent.
Overall, vegetable prices in June declined by (-) 21.16 per cent, against a rise of 18.62 per cent in the same month a year ago.As per the data, on YoY basis wheat became expensive by (-) 0.29 per cent, protein-based food items such as eggs, meat and fish became dearer by 1.92 per cent.