Mumbai, June 18: 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 percent for the week ended June 6, official data showed Thursday.
The inflation rate, which was 0.13 percent in the previous week, had last turned negative in 1977.
With this, India is possibly the only country now that is recording deflation though the European region is nearing the zero rate of inflation on account of recession.
The WPI for all commodities rose 0.04 percent 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 percent; that for fuel and power rose 0.7 percent. The index for manufactured products rose 0.1 percent.
The downward movement was aided by the decline in the prices of fruits & vegetables (7%), fish-marine (2%) and urad and gram (1% each).
However, the prices of arhar (7%), jowar and eggs (3% each), masur and maize (2% each) and moong, mutton, ragi, condiments & spices and bajra (1% each) moved up. The prices of soyabean (11%) also rose during the week.
There was an increase of fuel prices during the week primarily due to oil and naphtha (7% each) and light diesel oil (4%).
Manufactured products, which have a hefty weightage of 63.75 percentages in the data, also rose by 0.1 percent.
Salt (10%) and rice bran oil, sugar and cotton seed oil (1% each) rose putting more pressure on the common man. However, the prices of groundnut oil and imported edible oil (1% each) declined.
Meanwhile the WPI for the week ended 11the April 2009 has been revised to 0.96 percent as compared to 0.26 percent earlier.
The Reserve Bank of India had in April said that annual falls in the WPI should not be seen as deflation for policy purposes because the decline was a statistical reaction.
On a weekly basis, the WPI has been rising since early March due to a rise in commodity prices.
The WPI is more closely watched by financial markets than the monthly consumer price index (CPI) because it includes more products and is published on a weekly basis.
–Agencies