India's Fuel and Power Index Declines in April 2024

India's Fuel and Power index, a component of the Wholesale Price Index (WPI), decreased by 0.26% in April 2024, driven by a 1.20% drop in electricity prices, which has significant implications for the country's inflation rate and economic growth. The WPI inflation rate stood at 1.26% in April, influenced by rising food and energy prices, with the next release scheduled for June 14, 2024." This description focuses on the primary topic of the article (India's Fuel and Power index and WPI), the main entities (Department for Promotion of Industry and Internal Trade, Reserve Bank of India), the context (India's economy), and the significant actions and implications (inflation rate, economic growth, and monetary policy). The description also provides objective and relevant details that will help an AI generate an accurate visual representation of the article's content, such as charts or graphs showing the decline in Fuel and Power index and WPI inflation rate.

author-image
Trim Correspondents
New Update
India's Fuel and Power Index Declines in April 2024

India's Fuel and Power Index Declines in April 2024

India's Fuel and Power index, a key component of the Wholesale Price Index (WPI), dropped by 0.26% to 154.8 in April 2024 compared to 155.2 in March 2024. The decline was primarily driven by a 1.20% decrease in electricity prices during the month.

Why this matters: The decline in India's Fuel and Power index has significant implications for the country's inflation rate and economic growth. A drop in fuel and power prices can have a ripple effect on the overall economy, influencing the prices of goods and services and ultimately affecting the purchasing power of consumers.

The WPI, released monthly by the Department for Promotion of Industry and Internal Trade (DPIIT), measures the change in prices of goods traded by wholesale businesses. It is categorized into three main groups: primary articles, fuel and power, and manufactured products.

The overall WPI inflation rate stood at 1.26% in April 2024, up from 0.53% in March 2024. This increase was largely attributed to rising prices of food articles, electricity, crude petroleum, and natural gas. The WPI Food Index rose from 180.1 in March to 183.6 in April, with the inflation rate based on the Food Index climbing from 4.65% to 5.52% during the same period.

While the Fuel and Power index saw a decline, prices of mineral oils increased slightly by 0.06% in April. The index for the Manufactured Products group also rose by 0.50% to 140.8 in April from 140.1 in March.

India's annual retail inflation rate, a separate measure from the WPI, showed a marginal decrease to 4.83% in April from 4.85% in March, marking an 11-month low. This reduction was partially due to lower fuel rates, although food prices remained elevated. April marked the eighth consecutive month where retail inflation stayed within the Reserve Bank of India's acceptable range of 2 percentage points from its 4% target.

The next WPI press release is scheduled for June 14, 2024, which will provide data for the month of May 2024. Analysts and policymakers will closely monitor the trends in both wholesale and retail inflation to gauge the overall health of the Indian economy and make informed decisions regarding monetary policy and economic growth strategies.

Key Takeaways

  • India's Fuel and Power index dropped 0.26% to 154.8 in April 2024.
  • Electricity prices decreased 1.20% in April, driving the decline.
  • WPI inflation rate rose to 1.26% in April, driven by food and energy prices.
  • Retail inflation rate decreased to 4.83% in April, an 11-month low.
  • Next WPI release is scheduled for June 14, 2024, with data for May 2024.