STATESMAN NEWS SERVICE
New Delhi, 16 September
Reacting to the August inflation number of 6.1 per cent, highest in past six months, a concerned corporate India today asked the government to urgently address the issues, especially the supply-side bottlenecks, that are fuelling the inflation.
CII director-general Chandrajit Banerjee said: “The revival of inflation, especially that of food prices, calls for urgent steps to address supply-side bottlenecks which have been plaguing the sector.
The rise in inflation should not come in the way of forthcoming monetary policy on 20 September, as it is of utmost importance to revive investor sentiments."
Besides, core inflation continues to be stable, and inflation related to food prices is supply driven and not due to excess demand, he added.
The good monsoons experienced during the year should ease price pressure on food items going forward, he said.
“The rupee value displayed unprecedented volatility in the past few months depreciating by over 20 per cent since the beginning of this fiscal. While in the last few days, we have seen the rupee gaining ground against the dollar, the earlier fall is likely to have contributed to the inflationary pressures in the economy," said Mr A Didar Singh, secretary-general of Ficci.
“However, what has been a key concern for a long time now is that rise in food prices continues to contribute strongly to overall inflation.
“It is therefore important that structural factors affecting food inflation are addressed on a priority basis," added Dr Singh.