The industry body, Associated Chambers of Commerce and Industry of India (ASSOCHAM) today stated that rise in wholesale price index (WPI) numbers for the month of September 2017 was in line with the industry’s expectations with marginal rise in demand, increase in prices of crude oil and other commodities and global economic trends exhibit growth in macro-economic parameters.
ASSOCHAM said that prices of products which are of national interest has been continuously rising at industry level are vegetables, onion, fuel and power which policy makers should check and address the prices of products which are still at higher levels and are of national importance but recent concern is onion which has started to rise at much higher rate.
“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. And it may have negative impact on input prices for the industry which has already started to feel the pressure on its profitability,” said DS Rawat, Secretary General, ASSOCHAM.
The Chamber stated that since rise in WPI numbers may have corresponding upward impact on Consumer Price Index (CPI) which may limit the possibility of rate cut by RBI, which has already shown concern for increase in inflation in the future. It is clear from the recent global economic policy announcements that interest rates are going to increase in future, therefore, the chamber advises the policy makers to take corrective action to address the situation of rising interest rates coupled with the situation of twin balance sheet problems in India, limited capacity of private sector to invest and existing unutilised capacity of industries to produce.
The September 2017 WPI number stood at 2.60% as compared to 1.36% during the corresponding month of previous year. Going by the sectoral composition, the rise in WPI is mainly driven by vegetables, onion, LPG, petrol, and high speed diesel due to decline in production and resultant fall in supply while sharp downward movement was seen in the prices of paddy, wheat, pulses and potato.