RBI Deputy Governor Michael Patra on Friday said supply-side issues, including profit maximisation at retailers’ end, are hurting the inflation situation, which has breached the central bank’s comfort level in the past few months.
There is a window for cooling off in prices presented by the softness in vegetable prices in winters and arrivals of the kharif or summer crop, Mr. Patra said affirming the RBI is watchful of the demand-side issues.
“At current time, our assessment is that the large part of inflation pressures are emanating out of supply-side disruptions (like) at the level of retailer, very high margins being charged by the retailers and some amount of indirect taxes,” Mr. Patra told reporters.
He added, “if supply-side management is timely and effective, you will see the trajectory of inflation completely changing.”
