Lok Sabha Question No. 6096 (UNSTARRED), answered on 2017-04-11
Subject: Wholesale and Retail Inflation
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: PANKAJ CHOWDHARY

## Government of India Department of Consumer Affairs

## ORIGINAL IN HINDI

## Ministry of Consumer Affairs, Food and Public Distribution

## LOK SABHA UNSTARRED QUESTION NO. 6096

TO BE ANSWERED ON 11.04.2017

## WHOLESALE AND RETAIL INFLATION

## 6096.   SHRI PANKAJ CHAUDHARY: SHRI JUGAL KISHORE: (OIH)

## Will the Minister of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a) whether the Government has noticed the high rise in wholesale and retail inflations in the current  year  in  the  country,  if  so,  whether  the  high  price  rise  of  vegetables,  fruits,  wheat, sugar  and  many  more  items  as  well  as  the  cost  of  services  is  the  cause  behind  rising wholesale and retail inflations;
- (b) whether the Government has any scheme to control wholesale and retail inflation rates, if so, the steps being taken by the Government to control the inflations and ensure the supply of food items;
- (c) whether it is a fact that there is a big difference between the prices of essential commodities in retail and wholesale markets and if so, the average margin in this regard; and
- (d) whether it is also a fact that there is also a big margin between the cost  of production and retail price and if so, the average difference of prices?

## ANSWER

## miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k jkT; ea=h ¼Jh lh- vkj- pkS/kjh½

## THE MINISTER OF STATE CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION (SHRI C. R. CHAUDHARY)

- (a) :  The Wholesale Price Index (WPI) based inflation increased to 5.2 per cent in January, 2017 and 6.5 per cent in  February 2017 from 3.7 per cent in  December, 2016 mainly due to low base effect and rise in 'fuel & power' inflation reflecting hike in global crude oil prices. Inflation based on CPI (combined) has been declining continuously for the last six months, but recorded marginal increase  of  3.7  per  cent  in  the  month  of  February,  2017  mainly  due  to  food  items  and  low  base effect.

The month-wise inflation of various food items based on WPI and CPI (combined) during the last six months is given in Table below:

| Table : Inflation based on WPI and CPI (combined) (in per cent)   | Table : Inflation based on WPI and CPI (combined) (in per cent)   | Table : Inflation based on WPI and CPI (combined) (in per cent)   | Table : Inflation based on WPI and CPI (combined) (in per cent)   | Table : Inflation based on WPI and CPI (combined) (in per cent)   | Table : Inflation based on WPI and CPI (combined) (in per cent)   | Table : Inflation based on WPI and CPI (combined) (in per cent)   | Table : Inflation based on WPI and CPI (combined) (in per cent)   |
|-------------------------------------------------------------------|-------------------------------------------------------------------|-------------------------------------------------------------------|-------------------------------------------------------------------|-------------------------------------------------------------------|-------------------------------------------------------------------|-------------------------------------------------------------------|-------------------------------------------------------------------|
| WPI/ CPI                                                          | Items                                                             | 16-Sep                                                            | 16-Oct                                                            | 16-Nov                                                            | 16-Dec                                                            | 17-Jan                                                            | 17-Feb                                                            |
| WPI                                                               | Vegetables                                                        | -10.9                                                             | -10.0                                                             | -23.7                                                             | -34.9                                                             | -32.3                                                             | -8.1                                                              |
| WPI                                                               | Fruits                                                            | 14.1                                                              | 6.0                                                               | 2.4                                                               | -1.5                                                              | 3.6                                                               | 7.1                                                               |
| WPI                                                               | Wheat                                                             | 10.0                                                              | 9.2                                                               | 13.8                                                              | 15.8                                                              | 9.5                                                               | 8.4                                                               |
| WPI                                                               | Sugar                                                             | 32.9                                                              | 30.9                                                              | 32.0                                                              | 28.1                                                              | 22.8                                                              | 21.2                                                              |
| WPI                                                               | WPI All Commodities                                               | 3.8                                                               | 3.8                                                               | 3.4                                                               | 3.7                                                               | 5.3                                                               | 6.6                                                               |
| CPI                                                               | Vegetables                                                        | -7.1                                                              | -5.7                                                              | -10.4                                                             | -14.6                                                             | -15.6                                                             | -8.3                                                              |
| CPI                                                               | Fruits                                                            | 6.0                                                               | 4.4                                                               | 4.6                                                               | 4.8                                                               | 5.8                                                               | 8.3                                                               |
| CPI                                                               | Wheat                                                             | 4.9                                                               | 5.1                                                               | 6.9                                                               | 8.2                                                               | 8.4                                                               | 8.1                                                               |
| CPI                                                               | Sugar                                                             | 29.8                                                              | 26.9                                                              | 25.5                                                              | 23.5                                                              | 20.8                                                              | 20.6                                                              |
| CPI                                                               | CPI All Commodities                                               | 4.4                                                               | 4.2                                                               | 3.6                                                               | 3.4                                                               | 3.2                                                               | 3.7                                                               |

Source: Department of Industrial Policy & Promotion and Central Statistics Office.

Note: WPI inflation for the last two months and CPI (combined) inflation for the last one month is provisional.

- (b) : Government, inter alia, undertakes appropriate monetary and fiscal measures to control wholesale  and  retail  inflation  rate.  To  moderate  inflation  and  improve  supply  of  food  items Government has taken various measures from time to time including appropriately utilizing trade and fiscal policy instruments like import and export duty, Minimum Export Price, export restrictions etc. to regulate domestic availability and moderate prices; imposition of stock limits; and provision of  higher  Minimum  Support  Prices  to  incentivize  farmers  for  increasing  production.  Besides, Government is also implementing Price Stabilisation Fund (PSF) scheme for creation of buffer stock for  effective  market  intervention  to  help  moderate  the  volatility  in  prices  of  agri-horticultural commodities including onion, potato and pulses.
- (c  )  &  (d)  :  The  difference  between  the  prices  of  essential  commodities  in  retail  and  wholesale market  as  well  as  the  cost  of  production  and  retail  price  varies  due  to  various  factors  such  as transportation  cost,  loading/unloading  expenses,  grading/sorting,  wholesaler's  margin,  wastages during movement/weighing, location of retail shops, fixed overhead expenses of retailers and margin of retailers etc.

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