Food prices pull India's WPI down

New Delhi, July 14: A massive contraction in food prices dragged down India's annual rate of inflation based on wholesale prices to extremely low levels in June, official data showed on Friday adding to the clamour for an RBI rate cut.
According to data from the Ministry of Commerce and Industry, the wholesale price index (WPI), with the revised base year of 2011-12, decelerated further in June to 0.90 per cent from 2.17 per cent in May as food prices eased.
"The annual rate of inflation, based on monthly WPI, stood at 0.90 per cent (provisional) for June 2017 (over June 2016) as compared to 2.17 per cent (provisional) for the previous month and (-)0.09 per cent during the corresponding month of the previous year," the Ministry said.
"Build up inflation rate in the financial year so far was (-)0.44 per cent compared to a build up rate of 3.71 per cent in the corresponding period of the previous year."
The wholesale prices had decelerated in May to 2.17 per cent from 3.85 per cent reported for April. However, the WPI in June 2016 declined to (-)0.09 per cent.
The base year of the current WPI, which was revised in June from 2004-05 to 2011-12, does not include indirect taxes, thus decreasing volatility in inflation at wholesale level.