Decline in Wholesale Price Index

Inflation based on wholesale price index (Base 2004-05=100) remained negative since November 2014 as shown in table below:

Wholesale Price Inflation (in per cent)

Source: Office of the Economic Adviser, DIPP; Note: figure for last two months are provisional

The decline in wholesale price inflation is due to fall in inflation of majority of the groups like non-food articles, minerals, crude petroleum, fuel and power, rubber and plastic products and basic metals, alloys and metal products.

In India, inflation is measured in terms of Wholesale Price Index (WPI) as well as consumer Price Indices (CPIs) viz, Consumer Price Index-Rural, Urban, Combined, Consumer Price Index-Industrial Workers, Consumer Price Index-Agricultural Labourers and Consumer Price Index-Rural Labourers. The Reserve Bank of India (RBI) has started using CIP-combined as the sole inflation measure for the purpose of monetary policy. The agreement on Monetary Policy Framework between the Government and the RBI dated February 20, 2015 defines the price stability objective explicitly in terms of the target for inflation as measured by the Consumer Price Index-Combined.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.