India Inc on said the Seventh Pay Commission set up today for central government employees is likely to lead to additional burden on the exchequer and increase inflation by pushing demand.
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Narrowing of the current account deficit will help arrest depreciation of the rupee and ease inflation concerns, industry groups said.
Terming the rise in October retail inflation despite a bumper crop as "disturbing", India Inc said the government must immediately address supply side bottlenecks to bring down the consumer price inflation.
Expressing disappointment over the contraction in industrial growth in October, India Inc has appealed to the Reserve Bank to cut interest rates to revive the manufacturing sector and ameliorate investments.
Higher prices of onion and other vegetables and fruits pushed up inflation to 6.46 per cent in September.
Costlier onion and other vegetables pushed up inflation for the third month in a row to 6.1 per cent in August, making it difficult for the RBI to cut rate in the monetary policy review due later this week.
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