India's annual rate of inflation rose marginally to 0.31 per cent for the week ended March 21, after declining for eight consecutive weeks, official data showed Thursday. The inflation rate was 0.27 percent the week before.
The marginal rise was mainly on account of a rise in the official wholesale price index compared to the corresponding week of last year. Between March 14 and 21, the index rose 0.1 percent, data released by the commerce and industry ministry showed.
Among the three main commodity groups, the index for manufactured products rose 0.2 percent, while that for primary articles registered a small increase. The index for fuel, however, declined marginally to 320.9 (provisional) from 321.0 (provisional) for the previous week due to lower prices of furnace oil.
Economists, who have already warned of a deflation in the Indian economy, explain that lower inflation rate does not necessarily mean that prices have fallen. Lower inflation rate only means the rate of rise in prices has come down, not the actual prices.
Deflation is a decline in the general price level. It is caused by factors such as low money supply and credit, and a curb in spending by households, industry or government. The lower demand during deflation often leads to a rise in unemployment.