The Wholesale Price Index (WPI) is one of the important parameters. The Wholesale Price Index (WPI) should not be very lesser than the benchmark or very higher than the benchmark in order to prove beneficial to both the consumers as well as the sellers. The WPI is calculated by taking an average of the items taken in the calculation. The items like daily use, Fast-moving Consumer Goods, fuel, etc. are taken into account for the calculation.
The WPI index last year same time seemed to be very much lesser than what it is now, and that proved to be beneficial at the customer end and not so beneficial at the seller end. The commodities like vegetables and fruits only contribute majorly to the CPI. The last year 2016 in the month of September, the country did not face any such natural calamities like unprecedented rainfalls, cyclones, and floods that hinder the pattern of agriculture and that in turn resulted in a more supply than the actual demand. Later the movements of note ban and other historical movements like GST came into the picture which gave some troubles to the liquidity of cash in the market, and that made the situation worse to increase the prices of the daily goods.
The note ban and GST alone do not prove as an attribute to the hit in the market, the year 2017 under mid-August bashed the country with heavy rains and cyclones that did not seemingly go well with the crops and all were spoilt. The sudden rise in the oil prices also added to the misery.
Now that the states of Andhra Pradesh and Karnataka received a copious amount of rainfall in its agricultural land bearing districts that only helped to reduce the prices of vegetables and fruits and the decision of the Indian government to cut down the prices of fuels like petrol and diesel give a sigh of relief. However, owing to the protests at the state of Maharashtra’s Nashik, the highest mass cultivator of onion, the onion prices have soared high during the Diwali season as onions hold an important place in the kitchen of Indian households.
Overall, the present WPI is not a very balanced benefit proving one for the customers and the sellers but the changes from the month of August in itself a relief to the buyers. At present, the WPI inflation is 2.6% owing to the fall in vegetable and crude oil prices. The RBI makes sure to keep the levels of inflation at serious watch.