Double digit inflation a threat, say industry lobbiesJune 20th, 2008 - 5:10 pm ICT by IANS
New Delhi, June 20 (IANS) Indian industry lobbies have expressed concern over inflation crossing the double digit mark Friday. “At 11.05 percent, inflation is reaching the concern zone,” the Confederation of Indian Industry (CII) said in a statement after the inflation rate rose from 8.75 percent for the week ended May 31 to 11.05 percent, the highest in 13 years.
“This is the first weekly figure to factor in the fuel price hikes, which were announced on 4th June, and hence is not completely unexpected”, it said, adding: “However, inflation at double digits is a threat to the growth prospects of the country, and poses a huge challenge to the government.”
CII said though the government was “doing everything within its capacity” to contain the situation, the current level of inflation, reflecting global prices, “reduces the space for fiscal and monetary policy manoeuvrability”.
It called for “out-of-the box solutions”, saying industry would be “happy” to work with the government in containing inflation and ensuring economic growth is not seriously damaged.
“There is probably a case building up for the governments of the world to come together to deal with the global prices of critical items that are fuelling inflation. It is not just India, but most large economies, which have a lot to lose if the global price pressures continue”, the CII said.
The Associated Chambers of Commerce and Industry of India (Assocham) said it had anticipated double-digit inflation in view of rising prices of crude oil and soaring prices of essential commodities.
However, Assocham holds that the inflation would not stay over the double-digit level for long and that it would start coming down.
“Indications are that oil prices would subside and thereby would have impact on prices of essential commodities, which would result in scaling down inflation,” Assocham president Sajjan Jindal said.
He said inflation was not the concern of only the government, it was of equal concern for industry as well. “At times, patience is required to bear with the government as many things seem to have gone out of its hands.”
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