According to data released on Thursday, inflation based on the Wholesale Price Index rose 1.6% in June after vegetables, pulses and manufactured items became more expensive, reported PTI. In May, wholesale inflation soared to 7.88% with a 0.79% increase. In June 2015 it stood at -2.13%. The Wholesale Price Index represents the price of goods sold in bulk and traded between organisations instead of consumers and is used as an important measure of inflation in India.
Overall food inflation rose to 8.18% in June. Vegetable prices rose 16.91%, prompted by a 64.5% jump in potato prices. Prices of pulses climbed 27%, while sugar prices also rose. The government initiated several steps to check food and commodity inflation, including signing a memorandum of understanding with Mozambique. In case of sugar, the Centre imposed a 20% customs duty on sugar exports to boost domestic supply.
Retail inflation also hit a 22-month-high in June. A sharp rise in prices of vegetables have pushed the Consumer Price Index up 5.77% last month. Rural parts of the country recorded a higher inflation rate at 6.2% compared with urban centres, where the inflation was 5.26%.
The rise in wholesale and relatil inflation make a price cut by the Reserve Bank of India at its next policy meet unlikely. In its June monetary policy review, the apex bank had raised concerns over rising inflation, though it left policy rates unchanged. “Rate cut by the RBI on August 9 is definitely a no. The RBI is likely to maintain a status quo for a significant period of time,” said IDFC Bank Chief Economist Indranil Pan told PTI.