Context Wholesale inflation, based on the Wholesale Price Index, jumped to 14.23% in November from 12.54% in October (on a year-on-year basis)
Key takeaways
It was primarily due to rise in food prices especially of vegetables, and minerals and petroleum product
This is the highest level of wholesale inflation in the 2011-12 series and eighth consecutive month in which it has stayed at a double-digit level.
Retail inflation also showed an increase 4.91% despite a cut in excise duty on fuels.
Gap between WPI and CPI inflation
Despite not being a policy tool, the surge in the WPI is a cause of worry.
While the CPI-based retail inflation looks at the price at which the consumer buys goods, the WPI tracks prices at the wholesale, or factory gate/mandi levels.
Between the wholesale price and the retail price, the difference essentially is the former only tracks basic prices devoid of transportation cost, taxes and the retail margin etc.
