Inflation rises marginally to (-)1.14 per cent

New Delhi, June 25 (PTI) Driven by higher prices of
food items like pulses, cereals, milk, and fruit and
vegetables, India's inflation rose marginally to minus 1.14
per cent against (-)1.61 per cent in the previous week.

The wholesale price index stood at 11.80 per cent
during the corresponding week a year ago.

The index was 234.2 points for the week ended June 13
from 236.9 in the same week a year ago.

India possibly is the only major economy moving into a
deflationary zone though the European region is near zero
level due to recessionary pressures.

However, Reserve Bank Governor D Subbarao last week
had said there is no threat of deflation as food and crude oil
prices are still firm and India does not suffer from demand
constraints.

This is the second week in a row when inflation has
remained in negative territory.

Low inflation is prompting banks to cut interest
rates. Wednesday, the country's largest lender, State Bank of
India, reduced the benchmark lending rate by half a percentage
point, leading to cheaper home, car and corporate loans.

During the week, tea became expensive by 2 per cent
and arhar by 1 per cent.

At the same time, fuel items like aviation turbine fuel
surged by a whopping 12 per cent, light diesel oil by 10 per
cent and furnace oil by 3 per cent. (MORE) PTI