Mumbai: For the first time since the new wholesale price index (WPI) series started in 1995, India's annual rate of inflation turned negative, falling to minus 1.61 per cent for the week ended on June 6, official data showed on Thursday.
The inflation rate, which was 0.13 per cent in the previous week, had last turned negative in 1977.
The WPI for all commodities rose 0.04 per cent primarily due to a rise in the indices for non-food articles, manufactured products, and fuel, power, light and lubricants, as per data released by the Commerce and Industry Ministry.
While the index for primary articles declined 0.7 per cent, that for fuel and power rose 0.7 per cent.
The index for manufactured products rose 0.1 per cent.
The final data for the week ended on April 11 showed that the revised annual inflation rate actually stood at 0.96 per cent as against 0.26 per cent reported earlier based on provisional figures.
What is deflation
Negative inflation is when the annual inflation rate falls below zero.
What happens as a result is that there is an increase in the real value of money since there is a collapse in demand, usually due to high interest rates.
But the rise in purchasing power of every rupee is not such a good thing since negative inflation is an indicator of recession and, sometimes, long-term economic depression.
How PMs took on inflation
PM
Period
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