CII welcomes decline in inflation

The Confederation of Indian Industries (CII) on Tuesday welcomed the sharp decline in headline inflation. The Wholesale Price Index (WPI) inflation for the month of September touched a five-year low of 2.38 percent after a 3.74 percent reading in August.

According to the CII, this decline in inflation can be attributed to the softening of food and fuel prices and a decline in the prices of manufacturing goods.

Commenting on the occurrence, CII director general Chandrajit Banerjee said, "Going forward, the downslide in global commodity prices led by fuel together with improved monsoon conditions and favourable policy interventions should help contain inflation and prevent prices from resuming its inflationary tendency anytime soon."

"Furthermore, the prices of manufacturing goods have also declined, indicating a favourable impact on core inflation. The drop in the inflation would also help dampen inflationary expectations in the future and signal the onset of a low inflation cycle," he added.

The CII has also called for distribution reforms to ensure that the easing of food prices is a sustained phenomenon.