New Delhi: Reserve Bank Deputy Governor K C Chakrabarty has said the concept of inflation is often misunderstood by people.
" the banking world, the concept of inflation is often misunderstood by people," Chakrabarty said at a lecture on Tuesday at Banaras Hindu University.
"You would often hear this refrain from many persons that despite RBI claiming that inflation has come down in the recent past, the prices have not come down," he said.
Inflation, as measured by the Wholesale Price Index (WPI), was 6.55 percent in January this year and it inched up again to 6.95 percent in February on costlier pulses and vegetables. In February last year, it was 9.54 percent.
He further said, "...inflation is indicated as a percent change, so even when this percent is declining, all it means is that the prices are rising at a slower rate, but they are still rising! The prices would come down only when the inflation becomes negative."