New WPI series in place

Inflation for the month of August stood at 8.51 per cent, according to the new Wholesale Price Inflation (WPI) series released by the government 2010, 14th September.

As per the old series with a base year of 1993-94, WPI inflation stood at 9.5 per cent for the month, according to the Commerce Ministry.

Overall inflation in August witnessed a fall of 1.27 percentage points from 9.78 per cent in the month of July, as per the new series, which considers 2004-05 as the base year.

As per the new WPI index, inflation was 0.31 per cent in August last year. “It (the new index) will help in informing both the government and people how the prices are moving. This will give a robust picture and reflect actual price movement,” Commerce Minister Anand Sharma told reporters in New Delhi.

He said food inflation is still a cause of concern. As per the new WPI data released today, prices of primary articles - food, non-food articles and minerals - shot up by 15.76 per cent on an annual basis.

Finance Minister Pranab Mukherjee said: “Inflationary pressure is still there because food prices have gone up because of the erratic monsoon, but I do hope annualised inflation would be much lower in the new series.”

Year-on-year, food articles became dearer by 14.64 per cent, while prices of non-food articles likes fibres and oilseeds soared by 16.04 per cent. Minerals became 23.82 per cent more expensive. Fuel and power, including LPG and petrol, registered an annual inflation of 12.55 per cent.

Manufactured products - foods products, beverages, tobacco, cotton textiles, wood, paper, etc. - saw an average price rise of 4.78 per cent on an annual basis.

However, sugar became cheaper by 0.63 per cent year-on-year and leather and leather products also witnessed a fall of 0.08 per cent.

Consumer items widely used by the middle class, like ice-cream, mineral water, microwave ovens, washing machines, gold and silver are reflected in the new series of WPI inflation.

The new WPI series has 241 more items than the old index. With the additional items, the WPI now measures a total of 676 items against 435 earlier.