Challenges On The Price Front

index of industrial production (IIP)
  • Latest Consumer Price Inflation (CPI), wholesale price index (WPI) and index of industrial production (IIP) data released indicate price rise and falling industrial production.
  • This was due to varying levels of food inflation. WPI decreased sbutly due to a reduction in the prices of vegetables and CPI elevated driven by food prices.
  • Consistently high consumer inflation is not conducive for slashing of interest rates by the RBI as it will find it increasingly difficult to balance price stability and provision of credit needs of the real economy.
  • IIP also decreased indicating a year of stagnation in the industrial sector. Inflation will hinder revival of industry through a soft interest policy.
  • Govt should undertake supply side measures to bring down inflation.
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