ALSO READIndia August inflation seen at 5-month high on rising food costs RBI seen keeping rates on hold as inflation concerns revive DBS expects RBI to cut its policy rates by 0.25% RBI seen holding rates steady, expected to sound less hawkish Banks' borrowing rates will fall with lending rates: Jaitley
India Inc today said the spike in inflation, which rose to a six month high of 3.59 per cent in October, will ease in the coming months. Wholesale inflation rose to six month high of 3.59 per cent in October as prices of food articles, led by onion and vegetables, witnessed a sharp rise. The increase was led by firming up of food prices with vegetables segment remaining a key stress point at this juncture, said Pankaj Patel, President, Ficci. "However, this is due to adverse weather conditions and the situation should ease out in the coming months," he said. The chamber observed that under the present scenario, inflation targeting by the central bank may not be the best approach. "The manufacturing sector is showing signs of recovery and it is important to support this improvement through all policy levers.
The high real interest rates remain a challenge for the industry," Patel added. President of PHD Chamber Of Commerce Anil Khaitan hoped that the average inflation will remain below 4 per cent for the current financial year. Commenting on inflation data, Assocham Secretary General D S Rawat suggested the policymakers to take corrective action to address challenges being faced by the industry, like rising interest rates, and limited investment capacity. The government data released today showed that inflation in food articles more than doubled to 4.30 per cent in October. Both wholesale and retail prices edged up in the month of October.
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