The Modi government has received great relief on the inflation front. In fact, wholesale-based inflation has come down to 2.02 percent in June. The wholesale inflation was 2.45 percent in May.
In this case, the rate of inflation has declined by 0.43 percent in just one month. This June figure is the lower level of last 23 months. Earlier, the inflation was 1.88 percent in July, 2017. Compared to one year ago, the Wholesale inflation rate in June 2018 was at 5.68 percent.
According to new data, due to the decrease in prices of Vegetables, Fuel and Electricity, the wholesale inflation has been declining for the second consecutive month. The wholesale price index for food articles remained marginal at 6.98 percent in June, with a slight decrease, which was 6.99 percent in May. Vegetable prices were down 24.76 percent in the previous month, compared to 33.15 percent in May.
Similarly, if the wholesale price of potatoes was discussed, it was 24.27 percent in June, while in May the potato prices were down by 23.36 percent. However, prices of onion are on the rise and its inflation rate in June was at 16.63 percent. Inflation in onion in May was at 15.89 percent. What would you gain?
Relief on the inflation front is available at a time when the Reserve Bank of India is continuously making a repo rate cut. Actually, the repo rate is the rate on which RBI provides funds to the banks. The changes of repo rates depend largely on the inflation rate. Repo rate cut means that banks will get funds at affordable repo rates. The advantage of this will be to reduce the interest rate to the customers by cutting banks' interest rate.
