Wholesale Price Index (WPI) inflation stood at 5.2 per cent in January 2017, which was the highest in the last 29 months. Consumer Price Index (combined) declined to 3.2 per cent in January 2017 from 3.4 per cent in December 2016. The rise in WPI inflation during January 2017 was mainly due to rise in inflation of Fuel and Power.
Steps taken by Government to control inflation
The Government has been successful in bringing down the prices of essential commodities through astute food supply management. The steps taken include –
- increased budgetary allocation for Price Stabilization Fund in the budget 2017-18 to check volatility of prices of essential commodities, in particular, of pulses;
- created buffer stock of pulses through domestic procurement and imports;
- announced higher Minimum Support Prices so as to incentivize production;
- issued advisory to States/UTs to take strict action against hoarding and black marketing under the Essential Commodities Act 1955 and the Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980;
- imposed 20 per cent duty on export of sugar; and
- reduced import duty on potatoes, wheat and palm oil.
NOTE – Headline inflation is also called CPI (Combined) i.e. CPI (Rural + Urban). It is NOT WPI anymore.
Core Inflation includes ‘Headline CPI minus food and fuel components’.
- Imposed on products which have prices less than their fair normal values.
- Imposed under the multilateral WTO regime.
- Recommended by Ministry of Commerce (Directorate General of Anti-Dumping and Allied Duties DGAD), while the Finance Ministry imposes it.
- Anti-subsidy duties – Trade import duties imposed under WTO rules to neutralise the negative effects of subsidies.
- Imposed according with the GATT Article VI after investigating that a foreign country subsidises its exports, injuring domestic producers in the importing country.
- Imposed to ensure that imports in excessive quantities do not harm the domestic industry.
Temporary in nature.