Datanomics: Telangana slips into deflation, Andhra sees flat prices

Though Telangana saw deflation in June, this was not the first time. Around six and a half year ago, it witnessed deflation for two consecutive months of December and January

Consumers in Telangana may be a happier lot with the state witnessing a fall in retail prices in June year-on-year (Y-o-Y). The situation is similar in Andhra Pradesh, which saw prices staying flat in the same month. However, if this becomes a trend in the coming months, it could cause concern among producers. While both rural and urban areas in Telangana saw consumer price index (CPI)-based deflation in June at 1.45 per cent and 0.45 per cent, respectively, only rural Andhra witnessed negative inflation at 0.55 per cent. Urban areas had 1.06 per cent inflation.

 

Telangana’s deflation at 0.93% 

This was not the first time Telangana saw deflation. The state had witnessed deflation in two consecutive months of FY19 — it was 0.07 per cent and 0.29 per cent in December and January, respectively. These were significantly lower than the 0.93 per cent deflation in June. Andhra, meanwhile, saw deflation for four consecutive months in FY19. In June, inflation veered around the lower range of the Reserve Bank of India’s (RBI) mandate of 2-6 per cent at the national level — the lowest in around six and a half years. There has never been deflation at the all-India level since CPI inflation series started in January 2012. 

 

Blame it on food prices 

Telangana saw deflation in the food and beverage category for the fifth consecutive month in June, while Andhra witnessed the same phenomenon for the second month in a row. The all-India weighted average also saw deflation in this category in June.