In March, WPI inflation spikes to over 8-year high of 7.39%.
In March, on account of rising crude oil and metal prices, the wholesale price-based inflation shot up to over 8-year high of 7.39 %. Besides this, the low base of March last year, when the data was calculated with a low retort rate due to the nationwide lockdown, caused a spike in inflation in March 2021.
The WPI inflation was 4.17 % in February 2020 and 0.42 % in March 2020. This has been the third straight month of up-tick seen in the Wholesale Price Index (WPI) based inflation.
The Commerce and Industry Ministry said, "The annual rate of inflation stood at 7.39 % (provisional) for the month of March 2021 over March 2020”. This much high level of WPI was recorded previously in October 2012, when inflation was 7.4 %.
As the prices of pulses, fruits and paddy hardened in March, the inflation in food articles was 3.24%. The rate of price rise in vegetables was (-) 5.19 %, as compared to (-) 2.90 % in the previous month. In March, the inflation in pulses was 13.14 %, while it was 16.33% in fruits. In March, on account of rising prices of petrol and diesel primarily, the inflation in the fuel and power basket was 10.25 %.
While releasing data, the Commerce ministry said, "The prices of crude oil, petroleum products and basic metal substantially increased in March 2021 as compared to the corresponding month of last year. Also, due to nationwide lockdown, the WPI index for the month of March 2020 was computed with a relatively low response rate”.As per data released earlier this week, the retail inflation rose to a 4-month high of 5.52 % in March.
In its monetary policy earlier this month, the RBI didn’t change the policy rates and said that it will maintain a cooperative monetary policy stance to support growth and keep inflation at the targeted level. It anticipated the retail inflation at 5.2 % in the June quarter.