He also expressed concern at the slow industrial growth and called for tweaking the monetary policy to boost growth.
Two of India's main trade and industry bodies have urged the government to take pro-active steps to boost supplies given that India's annual rate of inflation, based on monthly wholesale price index (WPI), stood at 0.79 per cent for May 2016 (over May 2015).
Apex industry body Assocham said that rise in WPI is in line with industry's expectations#
“Industrial growth, particularly the manufacturing sector, continues to remain under pressure with limited signs of improvement in a few sectors. We need to broad base the growth impulses and this calls for support by way of an accommodative monetary policy. FICCI'S latest Business Confidence Survey indicates some improvement in capacity utilisation rates and for this to translate into higher investments there is a need to strengthen demand further. Investments in the industrial economy will be the key driver for sustaining a higher growth path and creating jobs and the current situation calls for all measures to be deployed towards this end”, Neotia added.
The WPI figure at 0.79 per cent for May 2016 compares unfavourably with the annual rate of inflation of 0.34 per cent for April 2016 and minus 2.20 per cent during May 2015. Build up inflation rate in the financial year 2016-17 so far was 2.34 per cent compared to a build up rate of 1.08 per cent in the corresponding period of the previous year.
Meanwhile, the official WPI for all commodities (Base: 2004-05 = 100) for the month of May, 2016 rose by 1.4 per cent to 179.4 from 177.0 for the previous month.
The index for primary articles (weight 20.12 per cent) rose by 2.4 per cent to 255.3 from 249.3 for the previous month. On the other hand, the index for fuel and power (weight 14.91 per cent) rose by 2.8 per cent to 180.3 from 175.4 for the previous month due to higher prices of furnace oil, high speed diesel, kerosene, aviation turbine fuel, petrol and bitumen.
Meanwhile, the all-India consumer price index (CPI) on base 2012=100 stood at 5.76 (provisional) in May, 2016 compared to 5.47 in April, 2016 and 5.01 in May, 2015, according to the Central Statistics Office, Ministry of Statistics and Programme Implementation. (SH)
ALCHEMPro News Desk – India
marketing@alchempro.com
