"The existence of numerous tiers of agents in the consumer product distribution results in higher retail inflation which in turn leads to wage-price spiral," said Mr D.S. Rawat, Secretary General of ASSOCHAM.
"Rising nominal wages, supply constraints especially in infrastructure, demand-supply imbalances in various regions are pushing the retail prices higher and higher," said Mr Rawat.
The WPI figures released today indicate that the prices of primary consumer goods particularly, rice, potato, fruits, milk, eggs, meat and fish have registered higher growth in March 2014. Prices of textiles, leather and plastics, further contributed to high inflation.
"The election related spending could be a key driver of both wholesale and retail inflation."
ASSOCHAM has been suggesting for policies that allow the free movement of agriculture commodities, promoting investment in manufacturing, allowing FDI in retail, using MNREGA for creating capital assets, and improving retail distribution networks.
"The New Government at the Centre must pay necessary attention towards these measures for effectively containing high retail inflation problem," said Mr Rawat.
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