Welcoming the estimates of low wholesale price inflation in September 2015, apex industry body ASSOCHAM today said that various steps taken by the government to tackle inflation seem to be yielding results.
“Moderation in inflation together with rebound in industrial production as per the recently released data provides a positive signal and indicates towards the fact that green shoots of economic activity might finally be becoming more visible,” said Mr Rana Kapoor, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
However, ASSOCHAM has raised a voice of concern over the possibility of deflationary conditions setting in the economy.
“This needs to be looked into by the policymakers, especially the adverse impact it might have on profitability of manufacturing sector needs special attention,” said Mr Kapoor.
“The central and state governments need to take proactive steps to contain any further rise in prices of essential commodities like pulses and onions,” he added.
“Moreover, if monsoon concerns are true then this could impact the agriculture production and stoke worries over food inflation,” further said the ASSOCHAM chief.
“With farm incomes suffering it could also very well impact the demand for industrial goods and there could be an adverse implication on the primary article prices in the near future, therefore, this also needs to be tackled to avoid any such consequences,” said Mr Kapoor.
“Swift policy action for reviving investments and business confidence, which in turn ensures a strong supply response, is desired,” he added.