Industry slams govt over high inflation

Source: PTI

June 20, 2008 19:50 IST

Managing inflation, which has reached a 13-year high of 11.05 per cent, appears to "have gone beyond government's hand" and is posing a major threat to growth, industry bodies said on Friday.

Assocham, CII and Ficci said inflation for the week ended June 7 has reached the "concern zone" and poses a threat to the economic growth.

"Inflation is not only a concern for the government but also a concern for the industry. . . Many things seem to have gone beyond its hands," Assocham said in a statement.

According to CII, the unabated rise in prices, though a reflection of global trend, "reduces the space for fiscal and monetary policy manoeuvrability, without seriously impacting growth".

Ficci

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said maintaining GDP growth would be a serious challenge before the government and "the prospects of strong economic growth as seen in the past would certainly take a hit".

However, the chambers said the double digit inflation was anticipated in the backdrop of increase in fuel prices at the retail level announced by the government on June 4.

The Indian economy has been growing by an average of over 8.5 per cent for the last four years.

It was accompanied by a moderate inflation for the last three years. But it started rising since February this year.