Remove Supply Hurdles To Overcome The Rising Prices Of Commodities

Commodities – Inflation Reaction By India Inc.

The present market is really high in terms of market and everything is a result of increased rate of inflation. The major thing to worry is the increased prices of the vegetables and food items despite a good crop production in the country. It is not only the people who are worried about the increasing prices of the commodities, India Inc has also demanded the government to take actions and remove the discrepancies with the supply issues to bring down the rising prices.


Chandrajit Banerjee, Director General of CII said that the increasing prices of food products call for immediate action and the government should take a look that the supply chain is managed properly and the intermediaries cost is cut down so as to lower the overall prices.

The present financial year has been marked to have the highest WPI, Wholesale price inflation of 7% due to costlier food products including vegetables.

Naina Lal Kidwai, FICCI president said that the rising prices of the food items have enhanced the pressure on the overall inflation and hence it has become imperative to remove the bottlenecks in the supply chain and bring the situation in control.

According to the government records, the rate of increase in the prices of food items was 18.19% in October. The major reason behind this situation is the intermediaries in the supply chain that create an imbalance by storing the products leading to crises and hence increased prices. The inflation in vegetable segment was marked to be 78.38 percent in October and the prices of onion still continued to rise as high as 278.21 percent.

The increasing rate of inflation is also making it difficult for the supreme authority, Reserve Bank of India to cut down the interest rates. However, India Inc has urged not to raise the interest rates.

Banerjee said that the monetary policy should not be affected by the rising inflation as the industry so far is already under a prolonged slowdown. The monetary policy is to be announced next month.

Kidwai said that they would urge the RBI to assess the policy rates with respect to the current inflation trends which occurred as a result of the bottlenecks in the supply chain. The Reserve Bank of India had already increased the repo rate twice and no more hikes in the rates can be taken up. Proper remedies for managing the supply chain are the only way to reduce the inflation and normalize the situation.

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