WPI Inflation: Inflationary pressure is continuously increasing in the country, which has a direct and severe impact on the common man’s pocket. Ministry of Commerce and Industry According to government data released by the government, the wholesale price index (WPI) inflation rose to 9.92 percent in the month of August. These rates are higher than the 9.78 percent recorded in the month of July. The index has been showing a continuous upward trend since the beginning of the current financial year, which has become a matter of concern for the Indian economy.

The triple whammy of inflation

According to the ministry’s report, price hikes in various sectors have fueled WPI inflation. Food inflation rose to 7.05 percent in August from 6.65 percent in July. WPI inflation in manufactured goods reached a high of 8.37 percent. The biggest jump was seen in the fuel and electricity sector, where inflation was recorded at 22.93 percent. Apart from this, prices of mineral oil, base metals and chemical products have also increased sharply.

Impact of global crisis

Global factors are mainly responsible for increasing inflationary pressure in the country. The ongoing war in West Asia and the blockade of the Strait of Hormuz have led to a sharp rise in crude oil prices globally. Most of India’s crude oil is imported through this route. Along with crude oil, fertilizer prices have also increased in the international market, which has increased the cost of food production and increased domestic inflation.

RBI’s stance

On the other hand, the Monetary Policy Committee of the Reserve Bank of India (RBI) has kept the benchmark policy rates unchanged at 5.25%. The committee has projected retail inflation at 5% for FY2027. The Reserve Bank cited inadequate and uneven southwest monsoon and El Niño conditions as key reasons for the inflation risk.