Trends in WPI
The above Charts shows that in the current financial year, the average inflation (April–December 2010) of 9.4 per cent was also much higher than the decadal rate. It has been driven by the primary articles (18.0%).
The Economic Survey notes that during the first half of 2009-10, the headline year-on-year inflation remained significantly low at 0.36 per cent on account of sharp increases in prices recorded in 2008-09. The second half of 2009-10 showed increasing food prices on account of unfavorable agricultural supply conditions coupled with the waning of base effect, leading to sharp increase in inflation.
- Thereafter, the headline WPI inflation reached 10.23 per cent in March 2010.
- Financial year 2010-11 started with 11 per cent headline inflation in April 2010.
- During 2010- 11, the monsoon situation has been better than last year.
- As per the Second Advance Estimates, production of food grains in 2010-11 is likely to be 232.07 million tonnes as compared to 218.11 million tons last year.
- However, demand pressures became visible in early 2010. From March to July 2010, headline inflation remained in double digits.
- The major contributors to this were primary articles whose inflation hovered in the range of 14.7 per cent to 21.5 per cent and fuel which recorded inflation in the range of 10.3 per cent to 14.4 per cent.
- However, the inflation in manufactured products remained in the lower range of 4.5 to 6.4 per cent during the current year.
The Inflation Trends in various segments of WPI is shown in the following charts:
The following Chart Shows the Inflation Trends in the Primary Articles (Weightage=20.12%):
The following Chart shows the Inflation Trend in the Fuel & Power (Weightage 14.91%):
The following Chart Shows the WPI Inflation in the Manufactured Products in WPI. The Weightage is 64.97%.
We see that the main concern has been the Food Index, which is discussed in next article.
List of Topics : Economic Survey 2010-11
