Economic Survey 2022: WPI continues to surge, India needs to be wary of imported inflation

Union Finance Minister Nirmala Sitharaman (Illustration: Moneycontrol)

Finance Minister Nirmala Sitharaman tabled the Economic Survey for 2021-22 in the Lok Sabha on January 31 ahead of the Budget 2022 for the financial year 2023 - due on February 1.

The wholesale price-based inflation (WPI) during the current financial year, in contrast to the trends observed in the Consumer Price Index (CPI) inflation, has shown an increasing trend, and remained high, said the Economic Survey report.

India’s CPI stood at 5.6 percent YoY in December 2021 which is within the targeted tolerance band, reported CNBC-TV18. However, Wholesale price inflation continues to run in double-digits.

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"Part of the high inflation in WPI being witnessed currently could be because of a low base in the previous year," the survey said.

However, India does need to be wary of imported inflation, especially from elevated global energy prices, it further added.

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The wholesale price-based inflation surged to more than a decade high of 14.23 percent in November 2021, mainly due to hardening of prices of mineral oils, basic metals, crude petroleum and natural gas.

Even during 2021, CPI based inflation, however, remained within the comfort zone of the Reserve Bank of India with the government mandating the central bank to keep inflation at 4 percent (+/- 2 percent).