Inflation falls to Zero, first time in 5 years

Moneylife Digital Team 15 December 2014

With inflation easing and many countries teetering on deflation, industry pushes for rate cuts, while consumers wait for the benefits to be passed on to them

Wholesale price inflation hit a zero level in November, the lowest in about five and half years, on account of decline in prices of food, fuel and manufactured items. The inflation was 7.52% in November 2013. The Wholesale Price Index (WPI) based inflation was at 1.77% in October 2014. As per data released by the government today, the food inflation fell to a nearly three year low of 0.63%. The index for the primary articles group declined by 1.0%.

"Given a subdued economic growth including the industrial output, India Inc is expecting at least 50 basis points cut in the benchmark interest rate at least this time around by the Reserve Bank of India when it takes into account falling inflation and a lower build- up of price rise, an ASSOCHAM survey has pointed out, ahead of the credit policy review on Tuesday," ASSOCHAM said.

"Helped by a sharp reduction in the crude oil prices which have dropped by about 30 per cent in the last six months, retail prices of several essential items of use to the common man like vegetables, cereals, milk and milk products have seen a moderation in inflation. In fact, there are items like vegetables which are selling at lower prices today than six months ago," ASSOCHAM added.

In the category of fuel and power, there was a broad based decline by 5.4%, with furnace oil down 13%, high speed diesel oil down by 10%, aviation turbine fuel down by 8%, petrol down 5% and kerosene down 3%.

Comments

User

VGANESAN

1 decade ago

Itis only in headlines.But my monthly household expenditure is increased.Corporates and middleman are not passing the benefit to the end consumers.Istrongly recomend RBI not to cut the rates before the benefit is passed on to the endusers.My milk card and mobile bill and vegetable prices and internet rates and electricity and rent etc are increased .Rbi governor rightly said monetary oilicy for economy And not to boost equity markets.