Apex industry body ASSOCHAM on Tuesday said that the rise in WPI (Wholesale Price Index) numbers for January 2017 is against the industry's expectations of falling demand post-demonetisation.
"Though some abatement in the vegetable prices and onion through policy measures is very much appreciated, similarly, policymakers should check and address the continuous rise in prices of products which are of national interest such as wheat since it may have some positive effect on CPI (Consumer Price Index)," said president ASSOCHAM, Sandeep Jajodia.
"The price situation at wholesale level in agriculture sector is still showing stress among farmer community as demonstrated in the index of primary articles which had fallen sharply in November and December, 2016, though some upward movement gained in January, 2017 due to ease in supply of bank notes," asserted Jajodia.
"Continuous increase in prices of petrol and high speed diesel due to rise in global crude oil prices have to be taken care of by the policymakers since it may have impact on import bills and subsequent impact on exchange rates," he added.
"It may also have a negative impact on input prices for the industry, which has already started seeing the pressure on its profitability owing to low demand," further said the ASSOCHAM chief.
He stated that since rise in WPI numbers at a level of 5.25 percent may have corresponding positive impact on CPI which may limit the possibility of rate cut by the Reserve Bank of India (RBI), which has already shown concern for increase in inflation in the future, therefore, given the signal of not having dovish tone.
"Therefore, we at ASSOCHAM have urged the policymakers to take corrective measures to address the situation of rising interest rates in future and limited capacity of industries to invest in future," said Jajodia.
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