Under pressure from rapidly increasing diesel and petrol prices, wholesale prices in the country continued to rise in January, showing a significant increase of a 30-month high of 5.25 per cent, while vegetables and pulses look moderated.
Wholesale price index (WPI) based inflation, which reflects the annual rate of price rise, has risen for the second straight month despite the cash crunch following note ban by the Government which continued till December 30.
In December and November, it stood at 3.39 per cent and 3.38 per cent, respectively.
In January 2016, the print was (-) 1.07 per cent. The previous high in WPI at 5.41 per cent was witnessed in July 2014. As per Commerce Ministry data, prices of petrol, diesel, minerals and manufactured items like sugar and fibre witnessed a spurt.
However, India Inc feels that felt that it showed the significant rise due to global crude price factor. “Continuous increase in prices of petrol and high speed diesel due to rise in global crude oil prices have to be taken care of by the policymakers since it may have an impact on import bills and subsequent impact on exchange rates,” industry body Assocham said.
Industry chamber Ficci also said the industrial economy is still weak and there is a need to improve the flow of credit to manufacturing and infrastructure sectors. “We also need to see a further reduction in the lending rates by banks and we hope that RBI’s guidance on this to the banks will be followed up in the form of further reduction in rates for companies,” Ficci said.