India Inc. on Wednesday called for an easing of the monetary policy in line with last month's deceleration in the country's annual rate of inflation based on wholesale prices.
According to data from the Ministry of Commerce and Industry, the wholesale price index (WPI), with the revised base year of 2011-12, decelerated in May 2017 to 2.17 per cent from 3.85 per cent in April as food prices eased.
On a year-on-year (YoY) basis, prices of food articles dipped 2.27 per cent during the month under review.
"I think the case for supporting growth is getting stronger and we hope that RBI will take a relook into its monetary policy stance in the light of these new numbers," said Ficci President Pankaj Patel.
"We need to boost investments and growth, which is so essential for employment generation across the economy."
Another major industry body Assocham urged the government to address the problem of higher prices for products such as cereals, paddy, milk and sugar.
"The 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 the policy-makers since it may have impact on import bills and subsequent impact on exchange rates," Assocham President Sandeep Jajodia was quoted as saying in a statement.
The chamber indicated that WPI data for the coming months is expected to fall as well.
Official data released on Monday showed that retail -- or consumer price indexed (CPI) -- inflation during May also fell to 2.18 per cent, as compared with 5.76 per cent in the same month of last year, pulled down by sharp fall in food prices.
Assocham added that the fall in WPI will have a consequent downward impact on CPI, which may allow RBI to induce the demand in the country by reducing the interest rates.
--IANS
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