India Inc calls for revision of prices of certain products

Raising concern on the rising wholesale price index (WPI) numbers for July, India Inc on Monday said policymakers should check and address prices of products still at higher levels and are of national importance.

"Continuous increase in the prices of petrol and high speed diesel due to rise in prices of crude oil globally have to be taken care of by policymakers since it may have impact on import bills and subsequent impact on exchange rates. And it may have negative impact on input prices for the industry which has already started to feel the pressure on its profitability," said Associated Chambers of Commerce and Industry of India (Assocham) Secretary General D.S. Rawat.

According to data from the Ministry of Commerce and Industry released here on Monday, India's annual rate of inflation based on wholesale prices (WPI) rose to 1.88 per cent in July from 0.90 per cent in June, due to an exponential rise in food prices.

On a year-on-year (YoY) basis, the WPI had risen by 0.63 per cent in July 2016.

"It is clear from the recent global economic policy announcements that interest rates are going to increase in future, as such policymakers must take corrective action to address the situation of rising interest rates coupled with the situation of twin balance sheet problems in India, limited capacity of private sector to invest and existing unutilised capacity of industries to produce," added Rawat.

According to Pankaj Patel, President of Federation of Indian Chambers of Commerce and Industry (Ficci), wholesale based prices have edged up in July on the back of a sharp increase noted in vegetable prices.

"However, the broad conditions for agri-prices remain conducive given normal monsoon in most parts of the country and stable global commodity prices. This outlook is also corroborated in the second part of the Economic Survey released last week.

"Given the trend and outlook for inflation, we see clear space for a more accommodative stance in the monetary policy. This is all the more important given the state of industrial sector where growth is anaemic... We look forward to a further cut in the policy rate by the RBI at the earliest," he added.

--IANS

ppg/him/vd