TELANGANA DEFLATION CASTS LIGHT ON FACTORS KEEPING INDIA’S RATE LOW

STATISTICS can confirm, challenge, or confound. In the case of October’s retail inflation rates for Telangana and the nation, it can clarify too.

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Both the counts notched up records, but of different kinds. The national retail inflation rate printed at 0.25 percent, the lowest since the beginning of this Consumer Price Index series a decade and a half ago. On the other hand, in Telangana retail prices fell for the fourth time in five months—one of the dozen states that faced deflation in October. Among the causes contributing to both phenomena are GST rate cuts, higher bases a year ago, and lower food prices, which command a substantial combined weight in the CPI. It should be a moment to cheer—high growth estimates at a time of low inflation. However, economists advise