It's disinflation, not deflation, we're facing now
Last Thursday's inflation numbers -- a drop to 0.44 per cent in the wholesale prices index (WPI) -- brought more worries that cheers. That's because deflation -- a situation where prices, jobs and incomes keep falling on a sustained basis, and the economy keeps contracting -- has become a new cause for worry. Is India on the cusp of a debilitating deflation?
Certainly not, say the experts. "These fears of deflation are unfounded," Pawan Kumar Bansal, Union minister of state for finance, told a news agency.
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