Industry pitches for more rate cuts as WPI remains negative

NEW DELHI: With inflation continues to be in the negative zone, India Inc today pitched for further easing of policy rates during the current year by Reserve Bank of India.

Industry chamber CII said going forward, the prospects of normal monsoon along with subdued global commodity prices and favorable government policies should restrain upside pressures on inflation.

"This should provide the space to the RBI to retain the dovish stance towards monetary policy and open up the door for further easing of policy rates during the current year," it said in a statement.

Ficci said the pressure which was seen arising from the food segment seems to be moderating, with prices of vegetables and fruits reporting a decline.

Further, recent meteorological prediction indicates expectation of normal rainfall this year which is a huge positive.

"Current inflation trajectory combined with positive monsoon forecast provides enough room for further accommodation in the policy rates which is critical for reviving the capex cycle in the economy," it said.

Continuing the deflationary trend for 17th month, WPI inflation was (-)0.85 per cent in March, but may inch up gradually in the coming months on growing pressure on food and vegetable prices.