India's overall inflation drops to 66-month low of 0 in November from 1.77

India's overall inflation, measured by the Wholesale Price Index (WPI), dropped 66-month low of 0% in November from 1.77% in previous month of October due to negative food inflation. Overall inflation stood at 7.52% in November last year. This is probably the first time when WPI inflation has hit the exact zero level. The last time WPI was lower than 0% was (—) 0.3% in July 2009.

The Food Price Index for November dropped steeply to 3-year low of just 0.63% compared to 2.7% in October. Food Inflation is on decline since May this year.  The rate of price rise for onions, vegetables were contracted by 56.28% and 28.57% respectively in November. Prices in fuel and power segment contracted by 4.91% in November compared to 0.43% inflation in October.

With 0% wholesale inflation and low retail inflation numbers, the RBI is expected to cut rates during its next monetary policy review meeting to be held early this year. RBI Governor Raghuram Rajan has kept the interest rate unchanged during its last monetary policy review meeting held early this month as he believed only interest rate cut won-t lift economy. He expects Government to take more bold steps in order to boost industrial as well as economic growth.