"One real challenge that looms ahead appears not to be the price inflation but the possible price deflation," Subramanian told reporters here.
India's annual inflation rate based on wholesale prices continued in the negative territory in June, falling to (-)2.4 percent from (-)2.36 percent in May, provoking India Inc. to call in unison for a Reserve Bank rate cut.
The annual rate of inflation, as per the official wholesale price index, stood at 5.66 percent in the corresponding month of the previous year, according to data released by the commerce and industry ministry.
Regarding the below-than-expected first quarter growth figures released earlier this week, Subramanian said the GDP numbers suggest that the "economy is recovering" and is consistent with the other more high-frequency indicators such as revenue collection and real credit growth.
The Indian economy grew 7 percent in the first quarter of this fiscal, showing signs of slowing vis-a-vis the 7.5 percent expansion in the quarter before. But the growth was much higher than 6.7 percent registered in the first quarter of the last fiscal.
India's indirect tax revenue in the first four months of the current fiscal (April-July) rose more than 37 percent to over Rs.201,000 crore, an official announcement said last month.
The indirect tax collections were at Rs.153,000 crore during the same period of the last fiscal.
Month on month, the July indirect tax collections grew by 39.1 percent over that recorded in the same period a year ago.
"Indirect tax revenue collections have increased from Rs.40,802 crore in July 2014 to Rs.56,739 crore during July 2015," a finance ministry statement said.
"Thus an increase of 39.1 percent has been registered during July 2015 over the corresponding period in the previous year," it added.