The wholesale price-based inflation, reflecting the annual rate of price rise, stood at 1.62% in June. Reacting, industry voiced concern and said steps should be taken to arrest inflationary tendencies.
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The earlier high in WPI inflation was recorded at 3.74 per cent in August 2014.
Wholesale price index (WPI) inflation in vegetables shot up by 28.05% in July, while that in pulses rose 35.76%.
Potato, a daily consumable vegetable, saw a price rise during the month of 58.78%.
This was mainly caused by a spurt in sugar prices, which rose by 32.33 per cent, as against 26.09 per cent in June, as a result of production shortages.
However, analysts expect food inflation to subside in coming months owing to good monsoon. It had risen by 1.17% in the previous month.
The index for “Basic Metals, Alloys & Metal Products” group declined by 0.6 percent to 153.0 (provisional) from 153.9 (provisional) for the previous month due to lower price of pig iron and melting scrap (5% each), billets (4%), wire rods (3%), rounds, angles, CRC, sponge iron, ferro manganese, pencil ingots, rebars, joist & beams, HRC and plates (2% each) and gp/gc sheets, pipes/tubes/rods/strips and sheets (1% each).
But then prices of other products in the wholesale price index remain under check.
There are indications, however, that the prices of vegetables are moving downwards. “On an all-India average basis, retailers are selling at more than 52.7 per cent of wholesale prices”, Assocham Secretary General D.S. Rawat said in a statement here.
ICRA said the gap between the wholesale and retail inflation would narrow in the second half of current fiscal.
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“Since CPI is at above threshold level of 5 per cent, the economy now is in need of strong actions from government to address the structural issues of demand and supply within the industry”, it said.
