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Inflation Increased to 6.1 percent in August 2013; Highest in Six Months

 19-SEP-2013

Suggested Readings: 2013 Current Affairs, September 2013 Current Affairs, Economy

Wholesale Price Index (WPI) for all commodities (Base year 2004-2005), in the month of August 2013 stood at 6.1 percent as compared to 5.79 percent in July 2013. This is the highest inflation in six months. Wholesale Price Index (WPI) indicates the inflation in the Country. It is also called as Head Line Inflation .It shows all India inflation data.

WPI basically consists of Primary Articles, Fuel and Power items and Manufactured Products covering all important items transacted in the economy.

Primary Articles

The weightage of primary articles in WPI is 20.12percent. The index for Primary Articles rose by 3.8 percent to 247.8 (provisional) from 238.8 (provisional) for the July 2013. The Index contains Food articles, non food articles and Minerals.

The index for Food Article: The index for Food Article group rose by 5.3 percent to 250.3 (provisional) from 237.7 (provisional) for July 2013.

The main reason for the increase in this index was higher price of fish-inland (22 percent), fruits and vegetables (13 percent), ragi and beef and buffalo meat   (3 percent each), milk (2 percent) and rice, mutton, poultry chicken and pork (1 percent each).  

However, the price of bajra and gram   (4 percent each), tea (3 percent), jowar (2 percent) and moong, egg and masur (1 percent each) declined.

The index for Non-Food Articles: The index for Non-Food Articles group declined by 0.5 percent to 209.6 (provisional) from 210.7 (provisional) for the July 2013.

The main reason for the decrease in this index was lower price of soyabean (12 percent), guar seed (10 percent), groundnut seed (5 percent), raw jute (4 percent), safflower, logs and timber and linseed (3 percent each), niger seed and rape and mustard seed (2 percent each) and mesta (1 percent).  

However, the price of flowers (15percent), copra (coconut) (5percent), raw cotton, coir fibre, raw silk (3percent each), sunflower and cotton seed (2percent each) and fodder and castor seed (1percent each) increased.


The index for Minerals: The index for Mineral’s group rose by 0.7 percent to 330.9 (provisional) from 328.5 (provisional) for the July 2013.

The main reason for the increase in this index was higher price of dolomite (10percent), sillimanite (6 percent), crude petroleum and limestone (1 percent each).

 However, the price of barytes (13 percent), zinc concentrate (5percent) and chromite and copper ore (1 percent each) declined.

Fuel and Power

The weightage of fuel and power in WPI is 14.91 percent. The index for this major group rose by 1.3 percent to 202.3 (provisional) from 199.8 (provisional) for the July 2013.

The main reason for the increase in this index was higher price of aviation turbine fuel (7percent), light diesel oil (4 percent), kerosene, LPG and petrol (3 percent each) and naphtha, bitumen and high speed diesel (2 percent each).
 
However, the price of furnace oil (2 percent) declined.

Manufactured Products

The weightage of manufactured products in WPI is 64.97 percent. The index for this major group declined by 0.1 percent to 150.0 (provisional) from 150.2 (provisional) for the July 2013.  

 The index for Food Products: The index for Food Products group declined by 0.7 percent to 167.7 (provisional) from 168.9 (provisional) for the July 2013 .

The main reason for the decrease in this index was lower price of tea leaf (blended) (15percent), tea leaf (unblended) (6 percent), oil cakes (4 percent),  groundnut oil (2 percent) and bakery products, mixed spices, cotton seed oil, palm oil and gola (cattle feed) (1 percent each).

However, the price of copra oil (9 percent), gur, coffee powder, processed prawn and sooji (rawa) (2 percent each) and maida, gingelly oil, rice bran oil and sugar (1 percent each) moved up.

 The index for Beverages, Tobacco and Tobacco Products :The index for Beverages, Tobacco and Tobacco Products group declined by 0.1 percent to 181.6 (provisional) from 181.8 (provisional) for the July 2013 .

The main reasons to decrease this index lower price of chewing tobacco (scented or not) and dried tobacco (2 percent each) and beer (1 percent).

However, the price of rectified spirit (1percent) moved up.

The index for Textiles
:The index for Textiles  group rose by 0.7 percent to 137.3 (provisional) from 136.4 (provisional) for the July 2013 .

The main reason for the increase in this index was higher price of cotton yarn and manmade fibre (2percent each) and woollen textiles and tyre cord fabric (1 percent each).  

However, the price of gunny and hessian cloth, jute sacking cloth and jute sacking bag (1 percent each) declined.

The index for Wood and Wood Products
:The index for Wood and Wood Products group rose by 0.8 percent to 177.2 (provisional) from 175.8 (provisional) for the July 2013.


The main reason for the increase in this index was price of timber/ wooden planks, plywood and fibre board and processed wood (1 percent each).

The index for Paper and Paper Products: The index for Paper and Paper Products group declined by 0.1 percent to 140.3 (provisional) from 140.5 (provisional) for the July 2013 .

The main reasons to decrease this index are lower price of maplitho paper and paper for printing / poster (1percent each).

However, the price of laminated paper (4percent) and paper cartons / boxes (2 percent) moved up.

The index for Leather and Leather Products : The index for Leather and Leather Products  group declined by  0.1 percent to 142.3 (provisional) from 142.5 (provisional) for the July 2013 due to lower price of  leather footwear (1 percent).

The index for Non-Metallic Mineral Products: The index for Non-Metallic Mineral Products group declined by 1.3 percent to 164.3 (provisional) from 166.4 (provisional) for the July 2013.

The main reason for the decrease in this index was lower price of white cement (3 percent), grey cement (2 percent) and slag cement (1 percent).

However, the price of marbles (3 percent) moved up.

The index for Basic Metals, Alloys and Metal Products: The index for Basic Metals, Alloys and Metal Products group rose by 0.2 percent to 162.7 (provisional) from 162.3 (provisional) for the July 2013.

The main reason for the increase in this index was higher price of silver and gold and gold ornaments (5 percent each), metal containers (3 percent), steel structures, aluminium and ferro manganese (2 percent each) and copper / copper ingots (1percent).

However, the price of furniture (10percent), sponge iron (3 percent), melting scrap (2percent) and ferro silicon, pencil ingots, wire rods, gp/gc sheets, angles and billets (1 percent) declined.

The index for Machinery & Machine Tools: The index for Machinery and Machine Tools group declined by 0.5 percent to 130.8 (provisional) from 131.5 (provisional) for the July 2013 .
The main reason for the decrease in this index was lower price of  electric generators (12 percent), fibre optic cable (7 percent),     electronic pcb /micro circuit (4 percent), battery dry cells, T.V. accessories and boiler and accessories (2 percent each) and batteries and hydraulic equipment (1 percent each).

 However, the price of ball/roller bearing (7percent) and pvc insulated cable, pump & assembly, heat exchanger, material handling equipments, capacitors, harvester and electrical pumps (1 percent each) moved up.

The index for Transport, Equipment and Parts:The index for Transport, Equipment and Parts group rose by 0.4 percent to 133.7 (provisional) from 133.2 (provisional) for the July 2013.

The main reason for the increase in this index was higher price of auto parts and motor vehicles (1percent each).  

However, the price of railway axle & wheel (2 percent) and parts of ships/boats etc. (1 percent) declined.

About Wholesale price index

WPI index is the most widely used inflation indicator in India.  This is published by the Office of Economic Adviser, Ministry of Commerce and Industry of Government of India. The base year for calculating WPI is 2004-05. WPI captures price movements in a most comprehensive way. It is widely used by Government, banks, industry and business circles.



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Read more Current Affairs on: Inflation, August 2013, Wholesale Price Index

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