CPI inflation in India will continue for some time while WPI levels are witnessing a deflation, Chief Statistician and Secretary with the Ministry of Programme Implementation and Statistics T C A Anant said today.
"The country will continue to have CPI inflation for some time due to market imperfections. But the deflation in WPI will cause concern for some sectors where the prices of intermediate goods are falling," Anant told reporters on the sidelines of a session organised by the Bharat Chamber of Commerce here.
To a specific query, he said it will be "difficult" to say the country is passing through a deflationary phase in general.
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Anant said CPI inflation has many structural ramifications, which is a result of lack of market integration.
"The deflation in WPI will cause worry for sectors where the input prices of intermediate and capital goods were falling. These sectors (companies in which they are in) will feel the pressure," Anant said.
In the long run, there could be possibility that the WPI and CPI movements would converge, he added.
Talking about the changes brought in the new national income accounting methods where the base year had been shifted from 2004-05 to 2011-12, Anant said that in the earlier series, much importance had been given to trade.
"In the new series, this importance to trade has been reduced as it did not contribute to GDP to that extent and importance of manufacturing has increased," he said.
Anant also said the new series has broadened the ambit of corporations for which the contributions of corporates has been increased to a large extent.
The earlier method of determining economic growth in terms of GDP at factor cost had been replaced by GDP at market prices, a universally accepted practice, he said.
Anant also said duration for GDP revision could be reduced if data flow mechanism improves and gets quicker, which is only possible if corporates file their returns, including income tax returns, more speedily.
