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Business EconomyPosted at: Jul 14 2016 3:50PM


India Inc expresses apprehension over rate cut after weak IIP & rise in WPI

New Delhi, Jul 14 (UNI) After weak factory output numbers and rise in inflation-based on Wholesale Price Index (WPI), the RBI could limit the key interest rates cut in the coming bi-monthly policy reviews, India Inc today expressed apprehension.

“The weak factory output numbers and rise in WPI numbers could lead to transition of high price from producers to consumers, that will eventually lead to rise in CPI numbers which is already on growth trajectory may limit RBI to reduce the key interest rates in coming bi-monthly policy reviews,'' ASSOCHAM said in a statement.

D S Rawat, Secretary General, ASSOCHAM said, “The prices of products which are of national interest has been continuously rising are pulses, vegetables, fibres, cereals, rice, sugar, wheat and oil seeds which policy makers should check and address through supply side responses, though it is good to note that prices of onions have been managed well.”

The Chamber suggested that the RBI would not be in a position to address the demand and supply in India when CPI is at high level, therefore now the economy of India is in need of strong actions from government to address the structural issues of demand and supply.

The chamber further advocates government to implement its capital expenditure judiciously to increase the demand first within the industry which will help the industry to produce more and address the situation of over capacity.

The wholesale prices have risen continuously for the third month. As per figures released by the commerce ministry, WPI is at 1.62 per cent for the month of June 2016 as compared to negative growth of 2.13 per cent during the corresponding month of the previous year.

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