Inflation cools to 2.6% on lower food prices

Cooling of food prices helped ease India’s annual rate of inflation based on the wholesale price index (WPI) in September to 2.6%, official data showed yesterday, even as industry welcomed the numbers saying it had opened room for the central bank to cut interest rates.According to data released by the Commerce Ministry, the WPI, with the revised base year of 2011-12, eased from 3.24% in August. The wholesale inflation rate was at 1.36% during September 2016.“The rate of inflation based on WPI Food Index consisting of ‘Food Articles’ from Primary Articles group, and ‘Food Product’ from Manufactured Products group decreased from 4.41% in August to 1.99% in September,” the statement said.“Index of ‘Food Articles’ group declined by 4% for the previous month due to lower price of fruits and vegetables (15%), betel leaves (6%), ragi (4%), bajra (3%), maize and tea (2% each) and poultry chicken (1%),” it added.Onion prices, however, continued to remain high with a 79.78% increase in September. The eggs, meat and fish category saw a price rise of 5.47%.Wholesale prices had risen in July to 1.88% from June’s 0.90% hike and an increase of 2.26% reported for May.On a segment-wise basis, expenses on primary articles, which constitute 22.62% of the WPI’s total weightage, declined during the month in consideration by 3%, from an increase of 2.26% in August.The index for ‘Non-Food Articles’ declined marginally by 0.2% in September, compared to the previous month.Instead, prices of the other major group under the WPI – manufactured products – which comprise nearly 64.23% of the index, rose marginally by 0.4%.Also, the fuel and power price index’s inflation accelerated in September by 1.7% over the previous month while, under this category, ‘mineral oils’ rose by 3.3%.