WPI inflation rises to 2.03% in Jan on costlier manufactured items, food prices ease

New Delhi: The wholesale price-based inflation rose to 2.03 percent in January, 2021, even as food prices cooled.

"The rate of inflation, based on monthly WPI, stood at (2.03%) (provisional) for the month of January, 2021 (over January, 2020) as compared to 3.52% during the corresponding month of the previous year," an official release said.

While food articles saw softening in inflation in January, manufactured items witnessed hardening of prices, as per data released by the Commerce and Industry ministry. Food inflation in January stood at (-) 2.8 per cent, against (-) 1.11 per cent in the previous month. Inflation in vegetables and potatoes was (-) 20.82 per cent and 22.04 per cent during January, while in the fuel and power basket it was (-) 4.78 per cent. In non-food articles inflation was higher at 4.16 percentduring the month under review.

The index for this major group declined by (-1.77%) to 143.9 (provisional) in January, 2021 from 146.5 (provisional) for the month of December, 2020. Prices of Crude Petroleum & Natural Gas (9.48%) and Minerals (2.67%) increased in January, 2021 as compared to December, 2020. Prices of Non-food Articles (-0.43%) and Food Articles (-2.99%) declined in January, 2021 as compared to December, 2020.

The index for this major group increased by (5.84%) to 99.7 (provisional) in January, 2021 from 94.2 (provisional) for the month of December, 2020. Prices of Electricity (11.49%) and Mineral Oils (5.55%) increased in January, 2021 as compared to December, 2020. Prices of coal remain unchanged.

The index for this major group increased by (1.54%) to 124.9 (provisional) in January, 2021 from 123.0 (provisional) for the month of December, 2020. Out of the 22 NIC two-digit groups for Manufactured products, 18 groups that have witnessed increase in prices.

The Reserve Bank of India (RBI) in its monetary policy decision on February 5, kept interest rates unchanged for the fourth consecutive meeting and said that the near-term inflation outlook has turned favourable. 

Meanwhile, retail inflation, based on the consumer price index, was at 4.06 percentin January, data released last week showed.