Inflation

Disinflation refers to a period where the rate of inflation has been slowing on a sustained basis.
 
WPI:
  • WPI measures the change in price level at wholesale market.
  • There are three main components in WPI –
    1. Primary Articles (weight: 22.62%),
    2. Fuel & Power (weight: 13.15%) and
    3. Manufactured Products (weight: 64.23).
  • Within WPI, Food Inflation is also calculated on year-on-year basis.
  • In India, headline inflation is measured through the WPI (the latest base year 2011-12) – which consists of 697 commodities (services are not included in WPI in India).
  • It is measured on year-on-year basis i.e., rate of change in price level in a given month vis a vis corresponding month of last year. This is also known as point to point inflation.
 
Current status:
  • Inflation at the wholesale level quickened to 5.77% in June, the highest since December 2013, driven in large part by rising fuel prices.
  • The announcement of Kharif MSP [minimum support price] by the Union government is expected to push it beyond the current levels.
  • The real upward push in wholesale inflation came from the crude petroleum and natural gas segment.