New Delhi: The common man has once again been shocked by inflation. According to the data released on Monday, the Wholesale Price Index (WPI) rose to 1.81 percent in September. It was 1.31 percent in August. Talking about last year, it was (-) 0.07 percent. Inflation of food items rose to 11.53 percent last month. It was 3.11 percent in August. However, wholesale inflation in September was still lower than the experts' estimates. Experts believed that wholesale inflation could be 1.92 percent in September.

Why is wholesale inflation increasing

The biggest reason for the increase in wholesale inflation is the skyrocketing prices of vegetables. Inflation in potato and onion remained high at 78.13 percent and 78.82 percent respectively in September. The fuel and power category witnessed deflation of 4.05 percent in September, while there was deflation of 0.67 percent in August.

What did the government say?

"The increase in inflation in September 2024 is mainly due to increase in prices of food articles, food products, other manufacturing, motor vehicles, manufacture of trailers and semi-trailers, manufacture of machinery and equipment, etc," the Ministry of Commerce and Industry said in a statement.

The Reserve Bank (RBI) mainly takes into account retail inflation while formulating monetary policy. It kept the benchmark interest rate or repo rate unchanged at 6.5 percent in its monetary policy review earlier this month. Retail inflation data will also come today.

Two types of inflation

There are two types of inflation in India, one is retail and wholesale inflation. Retail inflation rate is determined on the basis of the prices paid by the customers. Like when you buy vegetables or any other thing. It is also called Consumer Price Index (CPI). Whereas, Wholesale Price Index (WPI) is determined on the basis of the prices transacted between traders in the wholesale market.

How is the inflation rate decided?

Different items are included to measure inflation. Their weightage is also different. Manufactured products have a share of 63.75 percent in wholesale inflation, primary articles like food have 22.62 percent and fuel and power have 13.15 percent. Whereas, food and products have a share of 45.86 percent and housing has a share of 10.07 percent in retail inflation. Other items including fuel also have a share in it.