India’s annual rate of inflation, based on monthly wholesale price index (WPI), increased to 6.55 per cent for February 2017 over corresponding month of the previous year. The index for textiles sub-group rose by 0.2 per cent to 142.6 in February from 142.3 in January 2017 due to higher price of tyre cord fabric (4 per cent) and man-made fabric (2 per cent). Build up inflation rate in the financial year 2016-17 so far stood at 5.82 per cent compared to a build up rate of minus 1.14 per cent in the same period of the 2015-16. Annual rate of inflation was 5.25 per cent for January 2017 and minus 0.85 per cent in February 2016.
Meanwhile, the official WPI for all commodities (Base: 2004-05 = 100) for the month of February, 2017 rose by 0.5 per cent to 185.5 from 184.6 for the previous month, according to the provisional data released by the Office of the Economic Adviser, Ministry of Commerce and Industry. The index for manufactured products (weight 64.97 per cent) for February, 2017 remained unchanged at its previous month’s level of 158.8. The index for textiles sub-group rose by 0.2 per cent to 142.6 from 142.3 for the previous month due to higher price of tyre cord fabric (4 per cent) and man-made fabric (2 per cent). However, the price of jute sacking cloth and jute sacking bag (1 per cent each) declined.
The index for primary articles (weight 20.12 per cent) rose by 0.9 per cent to 258.1 from 255.7 for the previous month. The index for fuel and power (weight 14.91 per cent) also rose by 1.3 per cent to 203.8 from 201.2 for the previous month due to higher prices of coking coal, aviation turbine fuel, bitumen, kerosene, high speed diesel, LPG and lignite.
The Government of India has taken a number of measures to control inflation. The steps taken, inter alia, include, (i) increased allocation for Price Stabilisation Fund in the budget 2017-18 to check volatility of prices of essential commodities, in particular of pulses; (ii) created buffer stock of pulses through domestic procurement and imports; (iii) announced higher Minimum Support Prices so as to incentivise production; (iv) issued advisory to States/UTs to take strict action against hoarding and black marketing under the Essential Commodities Act 1955 and the Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980; (v) imposed 20 per cent duty on export of sugar; and (vi) reduced import duty on potatoes, wheat and palm oil.