Increase in build-up inflation indicates more pain ahead, says ASSOCHAM

While increase in WPI inflation to seven per cent for October against 6.46 per cent for the previous month is surely a disturbing sign, the rise in 'build-up inflation' to six per cent in the current financial year so far against 4.66 per cent in the corresponding period last fiscal clearly indicates that there is still pain ahead, said Mr. Rana Kapoor, President ASSOCHAM.

The inflationary pressure is being exerted from the primary articles and food prices, which are in a way, inexplicable given the fact that we had a good monsoon this year. By now, the impact should have been visible, added Mr. Kapoor.

The manufacturing inflation still staying at 2.50 per cent shows that the industry has been hit not only by slow consumer demand but also by its inability to pass on the rising raw material costs, as reflected in almost 15 per cent increase in prices of primary articles, to the customers.

We seem to have been slipped in a vicious circle of high inflation and low growth, which requires some courageous measures to boost supplies by way of fixing the distribution bottlenecks, effective market intervention and reviving the investment sentiment, said ASSOCHAM Chief.

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