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India Inc urges RBI to reduce key policy rates on easing WPI inflation

16 Jan 2018 Evaluate

In order to augment investments and boost economic growth, India Inc has urged the Central Bank to reduce key policy rates after the India’s wholesale price index (WPI) based inflation eased to a three-month low of 3.58% in December from an eight-month high touched in November. The WPI inflation cooled down, as prices of food articles declined even as fuel cost witnessed a surge.

India Inc has said that as the inflation numbers are being driven largely on account of supply-side factors, they urge the Reserve Bank of India (RBI) to calibrate its monetary policy stance giving equal weightage to growth consideration. Besides, the Industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) President Rashesh Shah said that lowering of the repo rate in the upcoming monetary policy is critical to boost investments and build the growth momentum at this juncture.

Shah further said that they also look forward to the Union Budget to provide details on more specific measures towards strengthening of agriculture supply chain for effective management of food prices. At the same time, they hope to see inclusion of petrol and diesel under the Goods and Services Tax (GST) in coming months, which should also help in lowering the pressures of fuel inflation.

The industry chamber, Associated Chambers of Commerce and Industry of India (ASSOCHAM) had said inflation may remain high till April-June 2018, even as successive hardening of core inflation in last five months can be seen as a cause for concern. ASSOCHAM Secretary General D S Rawat stated that the policymakers need to take care of the continuous rise in petrol and high speed diesel prices due to rise in global crude oil prices which may have an impact on import bills and subsequent impact on exchange rates.

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