With food items, notably pulses and onions, continuing to remain dear, India's annual wholesale inflation rate moved up further to (-)0.73 percent for December, against (-)1.99 percent for the month before, official data showed on Thursday.
This was the fourth straight month of increase in the annual inflation.
As per the wholesale price index numbers released by the Ministry of Commerce and Industry, the annual food inflation was steep at 8.17 percent, while index numbers for fuels and manufactured products were both in the negative -- at (-)9.15 percent and (-)1.36 percent, respectively.
In the past month, the index for food articles, that is unprocessed items, rose 0.6 percent while the build-up in the first three quarters of the fiscal was 9.39 percent. For food products, the rise was 0.3 percent in the past month under review, and 3.12 percent since April 2015.
India's overall retail prices too have been rising. According to the data released two days ago, the annual retail inflation moved up further to 5.61 percent in December from 5.41 percent during the month before.
The consumer price index numbers also showed that food inflation rose higher -- to 6.4 percent as against 6.07 percent in the month before. In rural and urban areas, the annual inflation rates for food items were 6.41 percent and 6.31 percent, respectively.
As per Thursday's data on wholesale prices, the annual inflation for pulses in general was 55.64 percent, while for onions it was 25.98 percent. But with potatoes cheaper by 34.99 percent over the past year, the annual rise in the overall vegetable index stood moderated to 20.56 percent.
India Inc., on its part, said prices of select food articles continue to exhibit pressure on the upside and this needed continuous monitoring by the government.
"Raising agri-productivity and astute supply side management is the key to tackling the elevation in prices of food articles," said A. Didar Singh, secretary general of the Federation of Indian Chambers of Commerce and Industry (Ficci).
According to Didar Singh, the continuation of the deflationary trend is an indication of weak demand in the economy besides being the spillover effect of lower oil and commodity prices.
"We hope that the central bank will respond to the situation appropriately and take steps that would aid the process of industrial recovery. At this juncture, propelling growth and creating jobs should be a priority and all policy levers should be geared towards that objective," added Didar Singh.
Another leading business body Associated Chambers of Commerce and Industry of India (Assocham) said the continuous fall in WPI was in line with the industry's expectations.
Assocham President Sunil Kanoria elaborated that while inflation is within the manageable limits, the focus of the government should now shift to revive the GDP (gross domestic product) expansion and industrial growth.
The industry body predicted that WPI will continue in the similar trajectory, as any prices increase of food items will be offset by decline in the cost of manufactured goods and fuel.
The industry body urged the Reserve Bank of India (RBI) to cut its benchmark interest rates in its next bi-monthly monetary policy, since inflation as targeted by it is well within the range.
