HYDERABAD: Telangana has again slipped into deflation, recording a minus 0.15% inflation rate for September, according to data released by the Ministry of Statistics and Programme Implementation. The all-India rate stood at 1.54%. Telangana is among four states reporting deflation — along with Uttar Pradesh (-0.61%), Assam (-0.56%) and Bihar (-0.51%).
In 2025–26, Telangana posted positive inflation for three months and negative for another three. Inflation stood at 1.26% in April, 0.55% in May and 0.94% in August, while June (-0.93%), July (-0.44%) and September (-0.15%) were in the negative. Rural inflation stood at -0.29% and urban at -0.05% for September. The decline, the ministry said, was due to a favourable base effect and falling prices of vegetables, oils, fruits, pulses, cereals, eggs, fuel and light.
Speaking to the TNIE, Patrick Anthony, Professor of Commerce at Osmania University (OU), said: “In Telangana’s case, a rate of -0.15% in September means the average cost of essential goods and services was 0.15% lower than in the same month last year. While deflation might sound positive, economists see it as a symptom of deeper economic stress. It is usually driven by two factors.
One is falling demand — when consumers and businesses lack confidence or have less money, they cut spending. Weak demand forces producers and retailers to reduce prices to clear inventory, leading to generalised price drops. The fact that rural inflation (-0.29%) is lower than urban inflation (-0.05%) shows that the weakness in demand is more acute in rural areas.
The second factor is a sudden abundance of goods, particularly food items — a common driver of low CPI in India — which can sharply push prices down. However, sustained deflation across multiple sectors is typically a demand problem.”
He added that sustained or recurring deflation is unhealthy because it triggers a damaging cycle of reduced spending, lower investment, and job losses. “The overall slowdown in consumption, investment and hiring means slower growth in the state’s Gross State Domestic Product (GSDP), straining its ability to fund welfare and development projects. The fact that Telangana has recorded negative inflation three times in a single financial year is a strong indicator that the state economy is grappling with a deep-seated demand deficiency that needs urgent policy intervention,” he said.
Cong’s ‘failed’ economic policies exposed: Harish
BRS MLA and former finance minister T Harish Rao, reacting on X, said while India’s retail inflation has dropped to an eight-year low of 1.5%, Telangana’s repeated deflation reflects “deep economic distress under the Bulldozer Congress government.”
He said September, traditionally a period of peak consumption during Bathukamma and Dasara, should have seen higher demand. “Instead, collapsing prices expose the failure of the state’s economic policies. This sustained deflation shows policy paralysis, financial mismanagement and vendetta-driven governance that have crippled local markets and slowed growth,” he said.
Why is deflation bad?
Deflation, a sustained decrease in the general price level, boosts the purchasing power of money. While this may seem beneficial, it is often a sign of economic trouble. Caused by reduced demand or oversupply, it can lead to a vicious cycle where consumers postpone spending, which then reduces business income, discourages investment and exacerbates an economic downturn.
