Inflation hits a Zero | Fusion - WeRIndia

At last, the food inflation reached to a zero in India which is the lowest in approximately five years of period. The Wholesale Price Index (WPI) based inflation hit a zero in November which was 7.52 percent in November, 2013.

According to the government sources and data released on Monday the food inflation have fallen to 0.63 percent which is almost the lowest in the period of three years. The decline in WPI inflation is due to the constant decline in the prices of fuel, food and manufactured items.

This may be the first time for the WPI inflation to hit the zero level exactly. Five years ago in July, 2009 it was -0.3 percent. Inflation in manufactured products such as edible oils, sugar, beverages and cement reduced to 2.04 percent in November which was 2.43 percent in the month of October. Even the prices in fuel and power segment fell by 4.91 percent, which was 0.43 percent in October this year.

The sharp decline in WIP inflation is due to the fall of retail inflation to a 4.38 percent in November which was the record fall in a sixth months period. The contraction in both retail and WPI inflation in November reduced to industrial production to 4.2 percent in October. It puts pressures on RBI to lower interest rates to increase growth. Yet, RBI governor Raghuram Rajan has stressed that cutting the interest rate alone would not lift the economy. It is anticipated that there will be a 5.4-5.9 percent growth in the economy this fiscal year.

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