Federation of Indian Chambers of Commerce and Industry (FICCI) President, Pankaj Patel on Tuesday said that inflation targeting by the central bank may not be the best approach in present scenario.
He also said that the manufacturing sector was showing signs of recovery and that the government should support this development through its policies.
"FICCI would like to reiterate that under the present scenario inflation targeting by the central bank may not be the best approach. The manufacturing sector is showing signs of recovery and it is important to support this improvement through all policy levers. The high real interest rates remain a challenge for the industry," said President, FICCI, Pankaj Patel.
He added that the increase in both wholesale and retail prices was led by firming up of food prices and the various measures undertaken by the government to promote agriculture are in the right direction.
"Both wholesale and retail prices edged up in the month of October. The increase was led by firming up of food prices with vegetables segment remaining a key stress point at this juncture. However, this is due to adverse weather conditions and the situation should ease out in the coming months," Patel added.
"The various measures undertaken by Government to promote agriculture and agro-processing are a step in the right direction. These should be taken forward with greater vigour. It remains extremely critical to create seamless agri-value chains and agri-infrastructure in the country to minimise wastage and maximise efficiency. Furthermore, agriculture market reforms with regard to APMC Act and e-NAM's should continue to be encouraged," the FICCI President concluded.
The Wholesale Price Index (WPI) grew to 3.59 percent (provisional) for the month of October, 2017 as compared to 2.60 percent (provisional) for the previous month, thus registering a growth of one percent.
The index for 'Food Articles' group rose by 2.2 percent to 148.0 (provisional) from 144.8 (provisional) for the previous month due to higher price of fruits and vegetables (9 percent), tea (5 percent), poultry chicken (3 percent) and paddy (1 percent each). However, the price of betel leaves (9 percent), ragi (7 percent), gram and bajra (5 percent each) declined.
Meanwhile, the index for 'Non-Food Articles' group declined by 0.9 percent to 119.2 (provisional) from 120.3 (provisional) for the previous month due to lower price of raw cotton (5 percent), fodder, mesta and cotton seed (3 percent each), raw rubber, safflower (kardi seed) and castor seed (2 percent each). However, the price of floriculture (8 percent), raw wool and raw silk (2 percent each) and soyabean (1 percent each) moved up.
On the Fuel and Power front, the index rose by 3.1 percent to 93.5 (provisional) from 90.7 (provisional) for the previous month.
The index for 'Mineral Oils' group rose by 3.9 percent to 82.2 (provisional) from 79.1 (provisional) for the previous month due to higher price of LPG (9 percent), naphtha, petroleum coke and ATF (8 percent each), furnace oil (7 percent), kerosene (5 percent) and bitumen, HSD and petrol (2 percent each).
The index for 'Electricity' group rose by four percent to 106.1 (provisional) from 102.0 (provisional) for the previous month due to higher price of electricity (four percent).
The index for 'Manufacture of Tobacco Products' group declined by 1.3 percent to 148.9 (provisional) from 150.9 (provisional) for the previous month due to lower price of cigarette (five percent) and other tobacco products (two percent). However, the price of beedi was up by 4 percent.
The index for 'Manufacture of Textiles' group declined by 0.2 percent to 113.2 (provisional) from 113.4 (provisional) for the previous month due to lower price of cotton yarn (2 percent) and woolen yarn (1 percent). However, the price of manufacture of knitted and crocheted fabrics (2 percent) and synthetic yarn (1 percent) moved up.
The index for 'Manufacture of Wearing Apparel' group rose by 0.4 percent to 137.1 (provisional) from 136.6 (provisional) for the previous month due to higher price of manufacture of knitted and crocheted apparel (2 percent).
The rate of inflation based on WPI Food Index consisting of 'Food Articles' from Primary Articles group and 'Food Product' from Manufactured Products group increased from 1.99 percent in September to 3.23 percent in October, 2017. (ANI)