"The diagnosis is wrong. Inflation has not occurred because people are demanding more food. Speculation trade is the cause of the increase in the rate of food articles," CPI(M) leader Sitaram Yechury said participating in the CII's annual session.
Yechury, who was speaking at a session on "Inclusive and Sustainable Growth and Coalition Politics", said the Government, instead of protecting the country from speculation, was reducing interest rates and reducing money supply, which he claimed would not help.
"You already have a dip in manufacturing, you already have a decline in the sale of consumer durables. You are in fact setting in motion a process of a slowdown of the Indian industry by this wrong diagnosis," he said.
He further said the "wrong diagnosis" could actually stifle the high trajectory growth rate that the country has had in the last five years.
Yechury said on one hand there is a "Shining India" which is growing at a rate not seen in decades, and on the other hand a "Suffering India".
He said inclusive growth required state intervention in terms of public investment.
"Unfortunately, we missed the bus in the last three to four years, which is manifesting in the present inflationary crisis," Yechury said.