No deflation risk for Indian economy as yet?

I mean it is outright amusing to even have an article like this –deflation risk in Indian economy of all places?

The wholesale inflation may have hit a zero level, but economists feel it is too early to worry about a ‘deflation’ possibility, as a ‘nil’ rate of price rise was just a statistical phenomenon in the current scenario.

They said that the ‘base effect’ was the main reason for the falling inflation, which stood at a much higher level a year ago.

Although loosely used for a general decline in the prices from their year-ago levels, deflation is a serious risk for any economy that is caused by an overall reduction in the supply of money or credit. A deflation can take place because of the government cutting down its spending, as also because of fall in personal and investment spending.

As per the latest government data, the Wholesale Price based inflation dropped to zero level in November, from 1.77 per cent in the previous month.

Missing basic lessons on economics. Deflation is much more than printing low inflation numbers. We heard the same story in 2008-09 as well only to chew on the words later.

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