India’s wholesale price index-based inflation rose to 5.25% in January from 3.39% in December 2016 on the back of higher rates for fuels, mint reported on Tuesday. This came a day after the country’s consumer price index-based inflation was reported to have gone down to 3.17% in January, the lowest rate in the past five years.
Data from the Department of Industrial Policy and Promotion showed that fuel inflation rose by 18.14% in January from 8.65% in December because of a sharp rise in petrol and diesel prices. The inflation rate for manufacturing also went up to 3.99% from 3.67% during the same period because of higher prices for metals and edible oils.
However, the ease in CPI-based inflation is because of the 15.62% fall in vegetable prices and a 6.62% drop in pulses prices. The retail inflation rate has been below 4% since the Centre on November 8 announced its decision to demonetise Rs 500 and Rs 1,000 notes. The inflation rate is also below Reserve Bank of India’s target of 5%. The central bank on February 8 kept its key policy rate unchanged at 6.25%.