Fall in Retail Inflation Big Relief to Policymakers: Assocham
New Delhi: Expressing relief at retail inflation in India falling to a 30-month low in June, the Associated Chambers of Commerce and Industry (Assocham) has suggested a slew of steps like scrapping of the Agriculture Produce Marketing Committee (APMC) Act and encouraging private sector investments in back-end infrastructure to bring down prices further.
Retail inflation fell to 30-month low of 7.31 per cent mainly on account of lower price rise of food items including vegetables, cereals and meat. (Read more)
"Indications that growth in the retail prices is moderating offers a big relief to the nation and its policymakers," said D S Rawat, Secretary General of the industry body.
"Existence of numerous tiers of agents in the consumer product distribution results in higher retail inflation. This leads to wage-price spiral, rising nominal wages, supply constraints especially in infrastructure and demand-supply imbalances in various regions which push the retail prices higher," Mr Rawat added.
Retail inflation, measured on consumer price index (CPI), was 8.28 per cent in May. It was lowest at 7.65 per cent in January 2012 when government started releasing the data in percentage terms.
The industry chamber also suggested that the government needs to come out with a definite time-bound roadmap for improving the management of supply of consumer products. This includes measures like scrapping of the APMC Act allowing farmers to sell their produce freely; slashing taxes and commissions on primary products related to agriculture, forestry and fishing at both Centre and States; encouraging private sector to invest in back-end to streamline value chains; and utilizing rural development schemes to create productive infrastructure.
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