India's chief statistician TCA Anant shows concerns over falling WPI

KOLKATA: India’s chief statistician TCA Anant has expressed concerns over the falling prices of capital goods with the wholesale price index falling 4.1 per cent year on year.

Anant on Friday said that the fall in prices of some intermediary and basic goods could have serious impact on viability of the companies making them.
"I am not undermining the fact that CPI (consumer price index) inflation is a matter of concern, but so is the negative WPI (wholesale price index)."

WPI inflation fell 4.1 per cent year-on-year in July, raising the fear of a worsening economy. Anant said that sectors facing the falling prices may in for trouble. The July WPI was the lowest since the official monthly series began in 1982, due to 1.16 per cent fall in food prices and 1.47 per cent fall in prices of manufactured items. WPI fell 2.4 per cent in June.

Retail inflation measured by CPI rose 3.78 per cent year-on-year in July, as against a 5.4 per cent rise in June. The Reserve Bank of India now use CPI as the key measure of inflation.

The divergence between WPI and CPI creates confusion to all. Anant said that the gap between the two principles of inflation indicators will persist since Indian markets are not perfectly integrated.