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Wholesale inflation at 0% in November

India’s wholesale price index-based inflation for November came in at 0%, down from from its October level of 1.7%, data released on December 15 showed.
 
Manufactured products, which have the single largest weightage in the index at 64.97%, declined 0.3%. 

The primary articles index, which has a 20.12% weightage, declined by 1.0%. Food articles declined by 0.4% while non-food articles declined by 0.7%. Minerals fell by as much as 5.9%. 

Fuel and power, which carry a 14.91% weightage, declined by 5.4%. Brent crude prices have tumbled in the past couple of months, hitting a five-year low last week. 

Irrespective, the stability of that number is unlikely to make much difference to corporate India or to equity markets, given Reserve Bank of Governor Raghuram Rajan’s position on inflation targeting. However, it is likely to give him some headroom heading into 2015. 
 
At his last policy review earlier this month, Rajan had held the repo rate unchanged at 8%, while holding out hope that the central bank was open to cutting rates outside the policy review calendar, but that such a move would be driven by available data.

The RBI is targeting a retail inflation level of 8% by January 2015 — a number it has likely already met, with CPI inflation falling to 4.38% in November — and 6% in the subsequent 12 months.  

Wholesale price index-based inflation on October had already plunged to a five-year low of 1.77% in October. 

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