Inflation increases posing challenge for Modi Govt
Updated: Jun 16, 2014 01:37:36pm
New Delhi, Jun 16 (KNN) The inflation even at the wholesale level is rising again with the WPI increasing to 6.01 per cent in May against 4.58 per cent a year ago and 5.20 per cent in April- posing a big challenge for the Narendra Modi Government to douse the price rise even as the country faces the prospect of deficient Monsoon this year. The inflation particularly of items used by wage employees like potato, rice, fuel and power will continue to exert pressure on the wage costs of the corporates.
Potato, an item of mass consumption with a bearing on the household budget of common-man, including the factory and rural workers, sold in May, 2014 at prices above 31 per cent more than the month last year. Likewise, prices went up of several items like fruits, egg, meat and fish.
Likewise, the prices for high speed diesel with a cascading effect went up by over 14 per cent. Experts feel the increase of inflation with prospects of poor rains does not augur well for the economy even as Prime Minister Narendra Modi had attempted to temper public expectations by preparing people to be ready for some tough measures, ahead of the first Budget of the new Government.
The macro data does not augur well for the industry which is battling slowdown and the inflation especially of the wage cost goods will not only increase the cost of production but would further slowdown demand. Under the circumstances, the RBI will also not be able to cut interest rates in the near future and may even be under pressure to jack them. (KNN Bureau)
Potato, an item of mass consumption with a bearing on the household budget of common-man, including the factory and rural workers, sold in May, 2014 at prices above 31 per cent more than the month last year. Likewise, prices went up of several items like fruits, egg, meat and fish.
Likewise, the prices for high speed diesel with a cascading effect went up by over 14 per cent. Experts feel the increase of inflation with prospects of poor rains does not augur well for the economy even as Prime Minister Narendra Modi had attempted to temper public expectations by preparing people to be ready for some tough measures, ahead of the first Budget of the new Government.
The macro data does not augur well for the industry which is battling slowdown and the inflation especially of the wage cost goods will not only increase the cost of production but would further slowdown demand. Under the circumstances, the RBI will also not be able to cut interest rates in the near future and may even be under pressure to jack them. (KNN Bureau)
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