Divergence between WPI & CPI inflation is disturbing: FM

NEW DELHI: Finance Minister Pranab Mukherjee today described the continuing trend of divergence between the rate of price rise as measured by wholesale prices and retail prices as "disturbing".

He said negative inflation was "statistical advantage" because of high base last year and agreed with the Planning Commission's assessment that wholesale price inflation would turn positive soon.

"Negative inflation is statistical advantage because of the year-on-year basis. On WPI, I do feel and I agree with the Planning Commission's assessment that positive inflation would be there by the year end. The disturbing trend is CPI is not converging with WPI for a very long period of time," the Finance Minister said at the Forum of Financial Writers.

Wholesale price Inflation has been negative for the 12th week in a row at 0.21 per cent during the week ended August 22, largely because the rate of price rise was too high at 12.76 per cent in a year ago period.

Planning Commission Deputy Chairman Montek Singh Ahluwalia had earlier said that inflation might turn positive in September or October.

On the other hand, inflation based on retail prices of items consumed by agricultural and rural labourers stood at close to 13 per cent, and that for industrial workers at close to 12 per cent in July.