India's inflation based on the Wholesale Price Index (WPI) declined to a 11-month low of 12.41 percent in August, the commerce ministry said on September 14.
WPI inflation was 13.93 percent in July. In August 2021, it stood at 11.64 percent.
Another month of double-digit increase in wholesale prices in August 2022 means WPI inflation has remained above the 10 percent mark for 17 months in a row.
The marked decline in WPI inflation in August was driven by a drop in fuel prices, with 'fuel and power' inflation falling to 33.67 percent from 43.75 percent in July.
Sequentially, the index of the 'fuel and power' group was down 4.8 percent from July. Meanwhile, the other two major groups of the WPI - primary articles and manufactured products - saw their indices rise 0.6 and 0.1 percent month-on-month.
Overall, the all-commodity index of the WPI was down 0.5 percent in August compared to July.
The sharp fall in wholesale inflation in August comes after data released on September 12 showed headline retail inflation increased nearly 30 basis points last month.
As per the statistics ministry, the more closely followed Consumer Price Index (CPI) inflation rose to seven percent in August from a five-month low of 6.71 percent in July on the back of an increase in prices of food items, specifically cereals, vegetables, and pulses.
However, the Reserve Bank of India will take heart from the big fall in WPI inflation even though the central bank's inflation mandate is set out in terms of CPI inflation.
The central bank has raised the repo rate by 140 basis points in the last four months to 5.4 percent and is widely expected to increase the policy rate by anywhere between 25-50 basis points at its meeting later this month.
The Monetary Policy Committee is scheduled to next meet September 28-30.
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