India's Planning Commission deputy chairman Montek Singh Ahluwalia on Sunday said a decline in India's wholesale price index (WPI) is ''absolutely no cause of concern''.
''We knew that it was going to appear negative for a while," he added.
Government data showed the wholesale price index fell 1.61 per cent in the 12 months to June 6th, its first drop in at least three decades and compared with the previous week's annual rise of 0.13 per cent.
Early this month, in an interview with a TV channel Ahluwalia struck the same note saying that the government's priority was on putting the economy back on the growth path and it did not matter much at what level the fiscal deficit stood – it is all about the trend of growth and people's perception and concerns on fiscal prudence that matters. (See: Deficit does not count, growth does: Ahluwalia).
On rising fiscal deficit, the deputy chairman of the Planning Commission said, "Bankers are always concerned about the size of the government's borrowing. Because it is very large, many of them think that the interest rate on government debt will rise and they would rather retain liquidity now in order to invest in high-yielding government bonds.''
He, however, advised bankers to wait, till the Budget as nobody knows what the government borrowing would be till that time.