The wholesale price index (WPI) inflation has softened to 10.7 per cent in September 2022 from its peak of 16.2 per cent in June 2022, Saket Dalmia, president, PHD Chamber of Commerce and Industry, said.The president of the industry body on Wednesday said calibrated efforts undertaken by the government and Reserve Bank of India (RBI) have significantly impacted the escalation in the wholesale prices.Though RBI took an aggressive move to tame the inflation and increased the repo rate by 190 bps during the last six months in May 4.4 per cent to 5.9 per cent in October, gross domestic product (GDP) growth rate has also been maintained with a lesser deceleration as compared with many economies, said Dalmia.Many of the economies were more aggressive while increasing the policy rates such as Canada increase the policy rates by 300 bps, followed by the US by 275 bps, Australia by 250 bps, UK by 175 bps, South Africa by 225 bps and Euro Area by 200 bps, said the industry body — PHDCCI. The industry body said Canada had been able to reduce the inflation rate by 120 bps by increasing the repo rate 300 bps.The US is able to reduce the inflation rate from 9.1 per cent to 8.2 per cent by increasing the Federal Reserve rate by 275 bps. South Africa is able to reduce the inflation rate from 7.8 per cent to 7.5 per cent by increasing the policy rate by 225 bps, the industry body said. India is able to reduce the inflation rate from 7.8 per cent to 7.4 per cent by increasing the policy rate by 190 bps, said the industry body, PHDCCI.
Calibrated steps by the government and RBI would be crucial to bring down inflation in the targeted trajectory along with maintaining economic growth at around 7 per cent in the current financial year 2022-23, said the industry body.PHDCCI said deceleration in the WPI inflation will continue and it will have a significant impact on the price corrections in the retail inflation; CPI inflation is expected to soften below 6 per cent by December 2022.
Going ahead, further cut in the excise duties especially on petroleum products along with bringing the petroleum products under the ambit of GST; strengthening the global value chains and shifting of the sources of the imports from higher price countries to low price countries and measures for preventing hoarding of the essential commodities to stop price accelerations would go a long way to stabilise inflation trajectory within the targeted range of Reserve Bank of India, said the industry body.