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 | Inflation (In percent) | ||
| Average | Highest | Lowest | ||
| Indira Gandhi | Apr 1971-May 1975 | 15 | 34.7 | 0.5 |
| Indira Gandhi | June 1975 - Mar 1977 | -4 | 9.1 | -11.3 |
| Morarji Desai | Mar 1977 - July 1979 | 5 | 10 | 1.2 |
| Charan Singh | July 1979 - Jan 1980 | 9 | 11.7 | 7 |
| Indira Gandhi | Jan 1980 - Oct 1984 | 11 | 14.4 | 6.1 |
| Rajiv Gandhi | Oct 1984 - Dec 1989 | 8 | 10.4 | 4.3 |
| VP Singh | Dec 1989 - Nov 1980 | 8 | 12.5 | 5.4 |
| Chandra Shekhar | Nov 1990 - June 1991 | 14 | 16.1 | 12.1 |
| PV Narsimha Rao | June 1991 - May 1996 | 10 | 15.7 | 4.5 |
| AB Vajpayee | May 1996 - June 1996 | 9 | 9.3 | 8.8 |
| HD Deve Gowda | June 1996 - Apr 1997 | 9 | 11.1 | 8.3 |
| IK Gujral | Apr 1997 - Mar 1998 | 7 | 9.7 | 4.7 |
| AB Vajpayee | Mar 1998 - May 2004 | 5 | 19.7 | 0 |
| Manmohan Singh | May 2004 - Jan 2009 | 6 | 10.4 | 2.8 |
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