Advising policy makers to keep an eye on prices of essential products, Assocham said that the prices of these products are continuously on a rice and its important to check and adderss this through supply side responses.
Assocham Secretary General D S Rawat told ANI that even at the Wholesale Price Index (WPI) level, the year on year sugar prices have gone up by over 29 percent and manufactured products too are growing by over double digit.
The industry body also stated that pulses rising by 22 percent and potato by over 60 percent too should be watched carefully.
Assocham states that October 2016 WPI figures may give some relief to manufacturers and producers since earlier it was hampering their pricing power and profitability and limiting their potential to increase capital expenditure.
It also states that prices of essential products which are of national interest has been continuously rising are cereals, rice, wheat, potato, fruits, milk, and egg, meat and fish which policy makers should check and address through supply side responses, though it is good to note that prices of vegetables and onions have been managed well.
However, Chamber warns that increase in WPI may result in increase in Consumers Price Index (CPI) which may affect the households and final consumers badly. Therefore, policy makers should take concrete steps to minimise the transition of price rise from WPI to CPI.
The Chamber suggests that RBI would not be in a position to address the demand and supply in India when CPI is at high level, therefore now the economy of India is in need of strong actions from Government of India to address the structural issues of demand and supply and Chamber further requesting Government of India to implement its capital expenditure judiciously to increase the demand first within the industry which will help the industry to produce more and address the situation of over capacity.