The gap between inflation rates based on the wholesale price index (WPI) and the consumer price index for industrial workers (CPI-IW) is narrowing sharply, and with the expected rise in WPI on account of the recent hike in fuel prices, the two rates could cross each other next month. The CPI-IW based inflation has been falling steadily since the begining of the fiscal.
Not only this, the WPI based inflation, which has been ruling at below 4 per cent for almost one year has once again crossed the 4 per cent mark in the week ending September 14.
In the coming months, the WPI is expected to rise due to higher energy prices. Part of the increase in the WPI is also expected on account of the low base effect. WPI based inflation levels had started dipping in September 2001 and continued to fall till February 2002.