PANJIM: Confederation of Indian Industries (CII) has stated that the inflation numbers essentially react to increase in food prices. A marginal rise in manufacturing and fuel products during the month and breaking the spiral of rising price pressures is necessary to revive industrial production, augment financial savings and strengthen growth.
To curb food inflation, urgent remedial measures are needed for augmenting agricultural supplies with thorough implementation of the model APMC Act, developing advanced supply chains, lowering procedural hurdles in the way of FDI in retail etc.
However, CII feels that the rise in inflation should not come in the way of an accommodative monetary policy announcement on December 18, as it is of utmost importance to strengthen investor sentiments which have been adversely affected by high interest rates. High interest rates at this stage may only worsen the industrial slowdown without helping ease inflation.
The government should, in tandem, take proactive policy initiatives with a focus on enhancing structural reform, thrust on project implementation, removing procedural bottlenecks, providing conducive regulatory environment, resolving issues in mining etc which would ease supply constraints.
