Fall in retail inflation offers big relief: Assocham

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oi-Staff

By Super

Published: Tuesday, July 15, 2014, 8:40 [IST]

Expressing relief at retail inflation falling to a 30-month low in June, industry body Assocham has suggested a slew of steps like scrapping of 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.

"Indications that growth in the retail prices is moderating offers a big relief to the nation and its policy makers," Assocham Secretary General D S Rawat said.

"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," he added.

The 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 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 Agriculture Produce Marketing Committee (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 utilising rural development schemes to create productive infrastructure.

During the month, the vegetable prices were down to 8.73 per cent as against 15.27 per cent in May. Prices of cereals and its products came cheaper with rate of price rise at 7.6 per cent as against 8.81 per cent a month ago.

Likewise, the rate of price rise for egg, fish and meat remained at 8.27 per cent in June, lower than 10.11 per cent in May this year.

The rate of price rise in milk and milk products also remained at 11.06 per cent, slightly lower than 11.28 per cent in May, showed the data.

PTI