If your household budgets have gone haywire due to the unprecedented phase of price rise, then you better tighten your belts for another round of price hike with a large number of companies indicating price hikes in the next six months, according to a survey.


The latest FICCI Business Confidence Survey (BCS) is clear that prices would burn a hole into your pockets in the next few months as the companies hit by inflation are contemplating price hikes even if it means lower demand for their products. “Companies are willing to take this extreme step even at the cost of some compression in demand,” it said.

On the export front, it said the business was worried over the steep appreciation of the rupee against the U.S. dollar and the euro. The survey drew responses from 325 companies with a wide geographical and sectoral spread. About 37 per cent, more than double (18 per cent) the previous survey, of the companies are going in for price rise to beat the adding-up costs.

The cost pressure on the bottom line has breached the absorptive capacity of a large number of firms. Running out of options, many firms are now looking at increasing prices, said FICCI. They attributed the cost rise to rise in manpower and raw material costs. For majority of them, inflation continued to remain at an elevated level, despite easing marginally to 9.59 per cent in April from 9.90 per cent in March. Besides, inflation is increasingly getting generalised and is spreading to non-food items from food products.

Rupee appreciation

The survey also voiced the growing concern of the exporters about the rupee's appreciation against the euro amid growing debt crisis in Europe. Demand from the EU region, which is one of the largest destinations for India's exports, is getting a little unsteady. “How the EU region manages the sovereign debt crisis will have a bearing on India's exports in the coming months,” it said.

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