Poll: Is Subramanian being alarmist calling deflation a worry?

India's economy faces a new challenge in deflation, chief economic advisor Arvind Subramanian said on Wednesday after GDP data earlier this week showed lower first quarter growth.

India's economy faces a new challenge in deflation, chief economic advisor Arvind Subramanian said on Wednesday after GDP data earlier this week showed lower first quarter growth.

Economy

"One real challenge that looms ahead appears not to be the price inflation but the possible price deflation," Subramanian said.

Read:Arvind Subramanian says deflation is a new challenge

"Overall, economic growth is moving in the right direction, although its pace is still below what the economy needs," he added.

India's annual inflation rate based on wholesale prices continued in the negative territory in June, falling to (-)2.4% from (-)2.36% in May, provoking India Inc. to call in unison for a Reserve Bank rate cut.