The inflation rate in India increased to 9.78 percent in August this year from 9.22 percent recorded in July based on 2004-05 as the base year. The rate of inflation was 8.87 percent in August 2010. This is the ninth consecutive month when headline inflation has been above nine percent.
The inflation rate in India is based on the wholesale price index (WPI). In India, the wholesale price index is more closely observed than the consumer price index (CPI), as it includes a higher number of products.
Prices of manufactured products, which have a weight of around 65 percent in the WPI basket, went up by 7.79 percent year-on-year in August. Inflation in manufactured products has been steadily rising since February this year. On an annual basis, iron and semi product prices grew by over 20 percent, while prices of basic metal alloys rose by 11.56 percent during August this year.
Meanwhile, Indian industrial production plunged to a 21-month low of 3.3 percent in July. Meanwhile, economic growth during the April-June period stood at 7.7 percent, the slowest expansion rate in the past six quarters.