In deflation zone
Deflation (Page 1, November 15) is more dangerous than inflation as the first discourages private business investment, leading to fall in employment, income and output in the economy. That, in October, India’s Wholesale Price Index reflected an inflation of -0.52 % is indeed a wakeup call for economic policymakers. Having said that, it must be remembered that the Reserve Bank of India has been following dear money policy (say, raising the repo rate to 6.5%, for instance) for quite some time now, to control, perhaps, retail inflation. India is a unique country in many respects.
S. Ramakrishnasayee,
