WPI inflation slips four-month low to 3.85% in April on cooling food prices

Govt revised the base year for calculating macroeconomic indicators to 2011-12

Inflation based on the wholesale price index slipped to a four-month low of 3.85 per cent in April as both food articles and manufactured items showed cooling in prices.

The government on Friday came out with the new series of wholesale inflation and industrial output data under which the the base year for calculating the macroeconomic indicators has been revised to 2011-12, from the 2004-05 earlier.

The index basket of the new series has a total of 697 items, including 117 for primary articles, 16 for fuel and power and 564 for manufactured products.

The WPI inflation readings, reflecting the annual rate of price rise, as per the new base stood at 5.29 per cent in March, 5.51 per cent in February, 4.26 per cent in January, 2.10 per cent in December and 1.82 per cent in November.

As per the data released today, inflation in food articles was 1.16 per cent in April, lower than 3.82 per cent in March.

The low food inflation was mainly because pulses saw deflation of 13.64 per cent, vegetables (-7.78 per cent), potato (-40.97 per cent) and onion (-12.47 per cent).

"A new food index is being compiled combining the food articles under primary articles and food products under manufactured products. Together with the Consumer Food Price Index released by the Central Statistics Office, this would help monitor the price situation of food items better," a government statement said.

As per the numbers, inflation in the fuel and power segment was 18.52 per cent while that of manufactured products was 2.66 per cent in April.

Last month, the Reserve Bank had left the key policy rate unchanged at 6.25 per cent for the third review in a row, citing upside risks to inflation. It had, however, increased the reverse repo rate -- which it pays to banks for parking funds with it -- by 0.25 per cent to 6 per cent, narrowing the policy rate corridor.

As per the new series data, industrial output growth slowed to 2.7 per cent in March as against 5.5 per cent a year ago.