New Delhi, Nov 14 (KNN)  With a huge difference between the inflation of primary articles and that of manufactured items, it is evident that the industry is not able to pass on the increased cost of production to consumers due to demand slowdown.

The MSME sector is even more vulnerable because of increasing cost of production.

While year-on-year inflation of primary articles went up by 14.68 per cent in October, it was only 2.5 per cent in manufacturing.

Attributing the industry’s problems to economic slowdown, “The industry is not running at full strength.  There are no orders and no new projects by the state or central government,” said Kassia (Karnataka Small Scale Industries Association) Vice President, P B Shashidar.

According to an official data, the country’s wholesale price index (WPI) rose to seven per cent in October, the highest in eight months, owing to hike in prices of fuel and manufactured goods, compared to 6.46 per cent in September.

Retail inflation has been a key determinant of the Reserve Bank of India (RBI)’s policy measures. “Food inflation is still worryingly high, and the effects of the harvest are still awaited,” RBI Governor Raghuram Rajan had said on Wednesday. Rising inflation had led to the central bank increasing the repo rate by 25 basis points to 7.75 per cent in its second quarterly review last month.  (KNN)