Reacting on the fall of inflation to 8.98%, the industry chambers are of the view that this decline is a sign of relief and the government should further call for a cut in the interest rates as well as easing of credit policy to fight the sharp slowdown in the industrial sectors.
The Associated Chambers of Commerce and Industry of India (Assocham) has said that the single digit growth in inflation needs policy makers to shift their further concern for the growth of economy to 8% by creating more consumer demand and encourage corporate sector investments with creation of job opportunities. Assocham expressed hope that the inflation target of 7% set by the RBI will be achieved by the end of current fiscal itself.
Reacting to the latest inflation figures Ficci?s president Rajiv Chandrashekhar said, ?Ficci had forecast this decline during the recent meet with the Prime Minister and have strongly urged that the government and the central bank to totally refocus and align fiscal and monetary policy on growth?.
Amit Mitra, secretary general, Ficci, said, ?Three major inflationary tendencies appear to be under some control. And this is showing up in the sharp deceleration in the latest inflation rate. The three factors are rise in food prices, rise in fuel prices and rise in commodity prices?. Notably, while inflation came down to 8.98% for the week ending November 1, 2008 from the previous week?s annual rise of 10.72%, industrial growth slipped to 4.8% in September 2008 from 7% in September 2007. The softer inflation regime creates scope for more monetary push for boosting industrial growth, added Mitra.
As per Ficci, the fall in the inflation rate can be attributed to the decline in the price of non-administered oil prices and the resultant sharp decline in the prices of four critical industry inputs – naphtha, jet fuel, furnace oil and diesel oil. Another critical input, that is, steel has also witnessed a decline in the prices by almost 7%.