Wholesale price inflation climbs to 14.55% in March. The broad-based inflation is led by fuel and power

Vikas Dhoot New Delhi

Inflation in India’s wholesale prices hit a four-month high of 14.55% in March, from 13.11% in February, driven by accelerating price rise across all categories of goods, with fuel and power as well as primary articles driving most of the gains.

This is the 12th month in a row that wholesale inflation has exceeded 10%. Fuel and power inflation surged to a three-month high of 34.5% in March, from 31.5% in February, while inflation in primary articles accelerated to 15.54% from 13.39%.

The month-on-month rise in the fuel and power index was 5.68%, more than double February’s 2.7%. The rise in fuel and power inflation was triggered mainly by an uptick in electricity prices, Morgan Stanley economists Upasana Chachra and Bani Gambhir said in a note.

Wholesale price inflation, which was at 7.89% in March 2021, had hit a record high of 14.9% in November and was at 14.3% in December. It had eased below the 14% mark in January and February.

While retail inflation had hit a 17-month high of 6.95% in March, largely due to higher food prices, the wholesale food price index inched up marginally to 8.71%, from 8.47% in February. “This was on the back of a sharper rise in the prices of manufactured food articles even as primary food prices remained stable,” Ms. Chachra and Ms. Gambhir said.

The high inflation was attributed “primarily to rise in prices of crude petroleum and natural gas, mineral oils, basic metals, etc. owing to disruption in global supply chain caused by Russia-Ukraine conflict”, the Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade, said in a statement.

‘Higher than expected’

Terming the broad-based spike in wholesale inflation “higher than expected”, ICRA chief economist Aditi Nayar said the jump in crude oil prices was the biggest contributor to the rise in inflation, followed by fuels and core items.