India's wholesale price-indexed (WPI) inflation in August has risen to 3.24 per cent, almost double that of July, government data showed on Thursday.
Wholesale inflation rose to a four-month high of 3.24 percent in August as prices of food articles, led by onions and vegetables, soared.
Onion prices witnessed a sharp surge at 88.46 percent in August, as against a contraction of 9.50 percent in the previous month.
Overall inflation of food articles went up by 5.75 per cent in August, as against 2.15 per cent in July.
Inflation in food articles doubled in August to 5.75 per cent from 2.15 per cent in July.
Although wholesale price inflation is less important for policymaking than CPI Inflation, the central bank is likely to take heed of the rise in August. However, the price of manufacture of wearing apparel (woven), except fur apparel declined 1 per cent. In fuel and power segment, inflation saw a surge to a near double digit inflation at 9.99 per cent, against 4.37 per cent in July. Before this, the WPI-based inflation was at its highest in April at 3.85%. Rising inflation will mean lesser room for the Reserve Bank of India to cut lending rates to revive anaemic industrial growth that stood at 1.2% in July. The index for textiles sub-group declined by 0.6 per cent to 112.7 from 113.4 for the previous month due to lower price of cotton yarn (2 per cent) and synthetic yarn and manufacture of other textiles (1 per cent each).
Commenting on WPI data, Assocham's Secretary General D.S. Rawat said while spike in vegetable prices is seasonal in nature, a huge jump in petrol by over 24 per cent and diesel by over 20 per cent is "worrisome and would prove to be cascading". "The need for a further cut in interest rates to stimulate demand and growth in the economy can not be overemphasised".