Data released by the commerce ministry on Monday showed wholesale price index (WPI) based inflation at 10.49% last month, up from 7.39% in March.
Inflation in fuel and manufacturing items rose to 20.94% and 9.01%, respectively, in April compared with 10.25% and 7.34% last month.
The WPI inflation in primary food articles rose to a six-month high of 4.9% in April, driven by fruits, non-vegetarian protein items and items such as tea.
The low base of wholesale inflation in April 2020 (-1.57%) magnified the commodities-led rise in inflation last month.
“The WPI inflation delivered a negative surprise for yet another month, hardening to a sharper-than-anticipated series-high 10.5% in April 2021,” said Aditi Nayar, chief economist at rating agency . She attributed a part of wholesale price increase to a weakening rupee.
Retail inflation in April eased to a three-month low of 4.29%, but experts consider it temporary.
“We see the April moderation in retail inflation as temporary, as there is limit to how low perishables can go, fuel prices have started to rise, and non-perishables remain elevated,” said Rahul Bajoria, chief India economist at British investment bank Barclays. He expects CPI to rise to 5.4% in May.
Economists expect a further rise in WPI as well going ahead because of an expected rise in commodity prices. Wholesale inflation in paddy, cereals, wheat, onion and pulses fell in April.
“This shows that the government has been able to keep inflation under control for essential food commodities despite supply disruptions during the pandemic. The government’s initiatives to build a buffer stock of essential food items by procurement through Price Stabilisation Fund, are yielding results,” said a government official.