The double digit inflation in June could be partly attributed to low base in the year-ago period when inflation was at -1.01%, which means even a small increase now would seem large
India’s wholesale price index (WPI) based inflation inched higher to 10.55% in June, owing to the pass through effect of the 25th June hike in prices of petroleum products, reports PTI.
The WPI numbers were provisionally 10.16% in May, while it was revised upwards to 11.23% for April from the provisional 9.59%.
However, the double digit inflation in June could be partly attributed to low base in the year-ago period when the inflation was at -1.01%, which means even a small increase now would seem large.
In June, the fuel index rose by 1.7%, due to higher prices of kerosene (9%), electricity (4%), petrol (2%) and liquefied petroleum gas (LPG) (3%).
The country's chief economic adviser Kaushik Basu had last month said he expects the hike in fuel prices to lead to one percentage point rise in inflation.
The prices of food articles rose marginally by 0.20% during June as prices of cereals, rice and wheat declined on a month-on-month basis.
Among manufactured items, wood products prices rose by 5.4% due to higher rates of plywood commercial planks.
Food inflation remained in double digits at 12.63% for the week ended 19th June, having moderated from over 16% level in the preceding eight weeks.
Among primary (raw) food items, urad turned costlier by 9%, meat by 7%, fish-marine (5%) and spices (3%).
The double digit inflation may put pressure on the Reserve Bank of India (RBI) to raise key policy rates to tighten money supply at its 27th July monetary policy review. The central bank has already raised rates thrice this year to combat high inflation.
Analysts said July figures are likely to be higher, as the hike in the prices of petroleum products would be reflected fully.
The government on 25th June had hiked petrol prices by Rs3.5 a litre while deregulating its pricing, and diesel by Rs2 a litre. Besides, it raised prices of LPG (cooking gas) by Rs35 a cylinder and kerosene by Rs3 a litre.