Inflation drops to 0.44% a historic low

The annual inflation rate in India has touched the historic low of 0.44 per cent for the week ended March 7. Previous week the inflation was recorded at 2.43 per cent.

The Wholesale Price Index for all commodities stood at 226.7 (WoW). Earlier, the lowest figure of annual inflation of 1.13 per cent was recorded on Feb 2, 2002. The current rate of annual inflation is historic one, but there might not be huge fall in retail price index.

The inflation rate last year was 7.78 per cent. It seems that the India is ready to welcome the deflation saying bye to the inflation. There is not the imminence of deflation, but the possibility of negative inflation persisting for a good six months.

Deflation can also come due to high base effect, which is an impact of high inflation last year on the current level of the rate of price rise, Goldman Sachs said, according to media reports.