Indian industry not to artificially push up the prices of their products, as this would only hurt its own interests by forcing interest rates to rise, Finance Minister P Chidambaram urged on Tuesday.
Speaking at the Annual General Meeting of Federation of Indian Chamber of commerce and Industry (FICCI), Chidambaram also asked corporate leaders to look into the reasons for poor performance of certain sectors like food products, paper, leather, chemical, basic metals and machinery.
The prices of primary items and fuel were no longer rising as before, he noted, but certain manufacturing items were keeping up the rate of inflation. "It is because demand is so high... Also because there are supply side constraints. This gives you enough room to inflate prices," Chidambaram charged. "With the economy growing at a clipping pace, to use these opportunities for profit alone is to take a short term view," he added.
The finance minister pointed out that, if core inflation gets entrenched at a certain rate, it would eventually push up interest rates and lead to the disadvantage of industry in the long term.