The leading Indian industry body Assocham on Monday said that continuous fall in India’s wholesale prices is due to a decline in crude oil prices, global weak demand, negative sentiments in China and Japan, and continuous 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 Sunil Kanoria, president of Assocham.
The RBI should cut its benchmark interest rates in its next bi-monthly monetary policy review since inflation as targeted by the central bank is well within the range, thereby creating room for further rate cut to support demand in India, he said.
The Assocham chief added that the effect of the Seventh Pay Commission's recommendations, OROP (One Rank One Pension), and schemes to encourage investment and savings will take time to boost demand in the economy.
The continuous decline in WPI numbers for manufactured products could adversely impact the pricing power of manufacturers in India.
India’s wholesale prices fell for 15th straight month in January, declining to 0.90 per cent as compared to 0.95 per cent in January 2015.
BW Reporters
Haider Ali Khan is an alumnus of IIMC. He holds a degree in English Journalism from the prestigious campus. His passion includes Aviation, Technology, Politics and Sports.
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