New Delhi, Feb 15 (ANI): Continuous fall in India’s wholesale prices is in line with industry’s expectation due to multiple factors like decline in prices of crude oil and other commodities, stated apex industry body ASSOCHAM here today.
It further elaborated that the fall is an indication from global weak demand, negative sentiments resulting from global economies such as China and Japan, which continuously decline in exports.
“Considering that inflation is within the target level of the government and the Reserve Bank of India (RBI), focus of policymakers should now shift to revive gross domestic product (GDP) and industrial growth demonstrated by declining index of industrial production (IIP),” said President ASSOCHAM, Sunil Kanoria.
“RBI should cut its benchmark interest rates in its next bi-monthly monetary policy since inflation as targeted by the apex bank is well within the range, thereby creating a room for further rate cut to support demand in India,” added Kanoria.
“Effect of 7th Pay Commission, OROP (One Rank One Pension) scheme, expected stimulus to be announced in budget this year (increase in public expenditure), schemes to encourage investment and savings will take time to boost demand in the economy,” added the ASSOCHAM chief.
He also said that fall in overall WPI figures may bring some cheers to the wholesalers, however, continuous decline in WPI numbers for manufactured products could adversely impact the pricing power of manufacturers in India.
Going by the sectoral composition, primary articles showing upward price pressures continuously for past 5 months which policy makers should check and address through supply side responses.
Kanoria also urged the policymakers to check and address supply side responses as going by the sectoral composition, primary articles are showing upward price pressures continuously for past five months.
India’s wholesale prices fell for 15th straight month in January, declining to -0.90 per cent for January, 2016 as compared to -0.95 per cent that was seen during the corresponding month of the previous year. A steep fall in prices of potato, minerals, high speed diesel and iron & semis kept the Wholesale Price Index in the negative zone. (ANI)