With global crude prices down nearly 40 per cent since June, wholesale inflation in fuels came down to minus 4.9 per cent against 11.08 per cent in November 2013.
The dip in producer prices comes days after consumer prices inflation abated to an 8-year low of 4.4 per cent.
Former Chief Economic Advisor Arvind Virmani told The Hindu that 0 per cent inflation shows that there was fundamental change in world economy. “The commodity boom is over, food prices peaked six months ago and the cycle has turned and global growth will be weak.” He said that all the economic data for India was reflecting a sharp drop in consumption, especially with real rural wages falling. There is a strong case for the interest rates to come down to spur investments and growth, he said.
“India is an inadvertent beneficiary of the global oil price fall. So the Government must find a way of converting the triple bonus [of narrowing fiscal and current account deficits and falling inflation] to be had from it into higher growth for which Government must generate sustained investments by alleviating the infrastructure bottlenecks,” Aditya Birla Group Chief Economist Mr Ajit Ranade told The Hindu .
Many sectors that had exhibited decline in exports during October recovered in November: Gems & Jewellery, Drugs & Pharmaceuticals, Engineering Goods, Cotton Yarn Fabrics and made-ups, Manmade Yarn & Fabrics, Coffee, Spices, and Carpets.
