New Delhi [India], May 13 (ANI): The rise in inflation is hurting businesses as it has impacted the discretionary buying capacity of the consumers, Deputy CMD of Microtek International Saurabh Gupta said on Friday.
He said the raw material costs have been on the rise since the onset of COVID-19 about two years back"Though the pandemic has abated, there is Russia-Ukraine war now," he said.
Gupta said during 2020 because of the reduction in rates by RBI, there was a lot of money available for businesses and consumers in the form of loans at very attractive rates.
"As the inflation is increasing, raw material prices have gone up again. We were expecting that this year the metal prices will decrease after the first quarter, but there is no such sign. As we speak, there is a huge semiconductor shortage still in India, which is affecting our industry as well as the automotive industry as a whole. So, prices are really going up for raw materials," he said.
"If I talk about our industry, the raw material prices, which include both commodities and semiconductors, these have gone up by almost 20 to 25 per cent and are still witnessing a rising trend. The inverter which we were selling at Rs 4,400 is now being sold at Rs 5,200 and we have not passed all the increase to consumers. Inflation is really hurting the businesses," he added.
Gupta said it is a Catch 22 situation for most businesses in terms of price rise.
"Microtek has invested heavily in RD. We are constantly innovating, getting new suppliers and new products which are readily available in the market to work with our products. That is one of the way we are avoiding a production loss and are able to supply adequate material to the market or channel," he said.
"Around 15 per cent of the price increase was passed on to the consumers last year and there is a possibility of another price increase of around 15 per cent being passed to the consumers in the coming months. Already, most of the industry and companies have done that," he said.
Talking about the current power crisis in the country, Gupta said that demand for inverters has shot up to three times due to power shortages in different states.
"Very interesting trend is emerging for the power backup industry. This is the first year during the peak summer times when COVID restrictions are not there, industrial activity is at an all-time high, power consumption at home is at an all-time high because of the extreme weather conditions," he said.
India's retail inflation surged to an eight-year high of 7.79 per cent in April due to a sharp jump in fuel and edible oil prices, the government data showed on Thursday.
The headline inflation is the highest in eight years. Consumer Price Index (CPI) inflation in April 2022 is the highest since May 2014, when it stood at 8.33 per cent.
Retail inflation has risen sharply. It stood at 6.95 per cent in March 2022. April 2022 retail inflation data is almost double from 4.23 per cent recorded in April 2021. (ANI)