The WPI deflation was in contrast with consumer price index-based inflation, which rose to a 17-month high of 5.69 per cent in January from 5.61 per cent in the previous month. It was way back in 1975-76 there was WPI-based deflation for a full year. The index had last showed inflation in October 2014, at 1.66 per cent. However, food articles remained in an inflationary zone, even as the rate of price increase declined. The inflation here decelerated at 6.02 per cent in January, compared to the 8.17 per cent rise seen in the previous month. Pulses, which have consistently provided the main inflationary push among food articles in FY16, continued to rise 44.91 per cent, although inflation mellowed from the 55 per cent rise witnessed in December. Inflation in vegetables declined to 12.52 per cent in January, compared to 20.56 per cent in the previous month.
Aditi Nayar, chief economist at Icra, said: "Notwithstanding correction relative to the previous month, inflation for pulses, vegetables and spices remained uncomfortably high in January."