New Delhi: India's wholesale price index (WPI) rose a higher-than-expected 7.55 percent in August from a year earlier, mainly driven by higher food prices due to deficient monsoon, government data showed on Friday.

The data comes ahead of a policy meeting at the Reserve Bank of India on Monday where the bank is expected to leave interest rates on hold as it grapples with inflation.

However, a move by the government late on Thursday to raise subsidised diesel prices for the first time in 15 months was seen as increasing the odds for the first rate cut since April.

Analysts on average had expected an annual WPI rise of 6.95 percent, a recent poll showed.

The annual reading for June was revised upward to 7.58 percent from 7.25 percent earlier. July's inflation was provisionally put at 6.87 percent.

Prices of potato, wheat and pulses as well as manufactured items soared, which may restrain RBI from cutting interest rates at its monetary policy review next week.

While in the manufactured items category, prices rose for cotton textiles, paper and paper products, cement and lime.

In the food articles category, pulses turned expensive by 34.39 percent in August, wheat by 12.85 percent and cereals by 10.71 percent on an annual basis.

Besides, potatoes turned costlier by 68.86 percent and rice by 10.29 percent.

Inflation in eggs, meat, fish prices was 13.77 percent, while in milk and fruits it was was 6.68 percent and 1.14 percent respectively. Vegetables became costlier by 9.98 percent in August, year-on-year. Inflation in this segment was 24.11 percent in July.

In non-food articles, inflation in oil seeds was 28.33 percent, fibre (3.53 percent) and minerals (9.74 percent).

The RBI is scheduled to come out with its policy review on Monday in which it is likely to hold policy rates steady as inflation still remains above comfort zone.


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