India’s Inflation Eases to 1.31% in August 2024
Ministry of Commerce and Industry Reports
The annual rate of inflation in India, based on the all-India Wholesale Price Index (WPI), eased to 1.31% in August 2024, down from 2.04% in July 2024. This information was provided by the Ministry of Commerce and Industry.
The rise in inflation was mainly due to increased prices of food articles, processed food products, textiles, and machinery and equipment. Despite this, the rate has moderated from July, indicating some easing of price pressures.
WPI Details
The WPI for all commodities in August stood at 154.5, showing a slight decrease from 155.2 in July. Primary articles, which hold a weightage of 22.62%, registered an index of 194.9 with a year-on-year inflation rate of 2.42%, down from 3.08% in July. This drop was driven by declining prices in minerals, crude petroleum, and natural gas.
The Fuel & Power category, representing 13.15% of the WPI, saw its index inch up to 148.1, though it posted a deflation rate of -0.67% for August, after showing 1.72% inflation in July. Electricity prices increased, while prices for mineral oils decreased.
Manufactured products, which make up 64.23% of the index, registered a minimal decline in their index from 141.7 in July to 141.6 in August, with an inflation rate of 1.22%. The WPI Food Index, tracking prices of food articles and manufactured food products, fell from 195.4 in July to 193.2 in August, leading to a lower annual food inflation rate of 3.26%, down from 3.55% in July. The drop in food prices, particularly in vegetables and fruits, contributed to this decline.
Month-over-Month Changes
On a month-over-month basis, the WPI declined by 0.45% in August compared to July. Primary articles saw a decrease of 1.37%, led by lower prices for minerals, crude petroleum, and food articles, although non-food articles showed a modest increase in prices. The Fuel & Power group experienced a slight increase of 0.14% in its index, with higher electricity prices being a key factor. The Manufactured Products group saw a marginal decline of 0.07% in August, with mixed trends across sectors. Some industries, such as food products, machinery, and motor vehicles, witnessed price increases, while others, including basic metals, chemicals, and textiles, recorded price decreases.
The final WPI for June 2024 has been confirmed at 154.0, with an annual inflation rate of 3.43%, based on a weighted response rate of 95.9%. This finalization provides a clearer understanding of inflation trends over the past months. The WPI for September 2024 is scheduled for release on October 14.
Doubts Revealed
Inflation -: Inflation means the increase in prices of goods and services over time. When inflation is high, things become more expensive.
Wholesale Price Index (WPI) -: The Wholesale Price Index (WPI) measures the average change in prices of goods sold in bulk, like to shops or businesses, not directly to consumers.
Ministry of Commerce and Industry -: The Ministry of Commerce and Industry is a part of the Indian government that looks after trade, business, and industry in the country.
Deflation -: Deflation is the opposite of inflation. It means that prices of goods and services are going down instead of up.
Primary articles -: Primary articles are basic goods like food, raw materials, and minerals that are used to make other products.
Fuel & Power category -: The Fuel & Power category includes things like petrol, diesel, and electricity, which are used to run vehicles and machines.
WPI Food Index -: The WPI Food Index measures the change in prices of food items sold in bulk, like grains, vegetables, and fruits.
