 "T C A Anant")
Echoing Chief Economic Advisor Arvind Subramanian’s warning on deflation, Chief Statistician T C A Anant has raised a red flag on the negative rate of wholesale price index (WPI). “WPI covers a much wider part than CPI (consumer price index). A negative price growth in the major sectors has serious implications,” he said.
Subramanian had on Wednesday cautioned India was facing a challenge in deflation. “Price-wise, the Indian economy appears to be in or close to deflation territory and far away from inflation territory,” he had said.
According to Anant, the difference between retail and wholesale inflation arises because the country’s final consumption market is not perfectly integrated.
“There are various impediments for the pricing in the final consumption market. In India, the markets are not perfectly integrated and there is equal competition among all segments of the economy.”
The wholesale price index (WPI)-based inflation continued its negative trend for the eighth consecutive month at negative 2.4 per cent in June. The data comes a day after the retail inflation for the same month rose to an 8-month high of 5.4 per cent.
The annual rate of inflation, as per the official wholesale price index, stood at 5.66 percent in the corresponding month of the previous year, according to data released by the commerce and industry ministry. GDP growth also slowed to 7% in the April-June quarter from 7.5% in the January-March quarter as measured at marketprices.
