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Industry facing biggest challenge as rising raw material costs: Survey
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SME Times News Bureau | 07 Jun, 2021
As the nation tries to fight the second wave of the pandemic, which has
brought with it a record number of infections and fatalities, the PHD
Chamber of Commerce and Industry conducted a quick survey to assess the
impact of the current situation on industry.
The survey, which
was conducted across 34 sectors, revealed that 73 per cent of the
respondents were struggling with the rising cost of raw materials as
restrictions in many parts of the country have impacted the pace of
economic recovery with an uncertain economic environment, disruptions in
supply chains and contraction in demand.
Other key challenges
faced by businesses are availability of working capital (64 per cent),
Maintaining price-cost margins/profitability (63 per cent), Weakening of
demand (62 per cent); Retaining of the full workforce (61 per cent),
Costs of deployed workforce (60 per cent), Payment of wages/salaries to
workers/employees (55 per cent), Repayment of loans/payment of EMIs (53
per cent), Costs of capital (52 per cent) and Costs of compliances (51
per cent).
Although the challenges are multifaceted, the survey
found that companies are prioritising vaccination of employees (73 per
cent) as one of the key strategic plans/focus areas to tackle the
situation. Businesses are also focusing on increasing sales volume (64
per cent), increasing the scale of business operations (64 per cent),
enhancing competitiveness of business (64 per cent), cut in costs of
business operations (64 per cent), enhancing the price-cost margin (55
per cent), focusing on innovation, research & development (55 per
cent), enhancing business operations in the domestic market (55 per
cent), reducing the workforce in business operations (45 per cent), and
enhancing business operations in the international market (36 per cent).
"Coronavirus
2.0 induced restrictions in the country have created a difficult time
for the industry. The entire economic activity is severely impacted with
the closure of offices and shops," said Sanjay Aggarwal, President,
PHD Chamber of Commerce and Industry. "The supply chain disruptions are
causing skyrocketing commodity prices, which have severely impacted the
price cost margins of the businesses in the difficult pandemic time of
coronavirus".
The survey, which was conducted by the PHD Chamber
between April and May 2020, involved businesses across the micro, small,
medium and large enterprises.
Respondents also rated the relief
measures taken by the government to mitigate the effects of the
pandemic. According to the survey, 47 per cent of the respondents rated
the government's measures at 7 out of 10, while 42 per cent rated the
vaccination drive at 6.
Aggarwal urged the government to speed up
the vaccination process over the next 2-3 months to cover most of the
population. In order to do so, he said, vaccine production capabilities
needed to be enhanced domestically while also increasing imports from
other countries.
"Going ahead, a substantial stimulus to create
effective strides for futuristic growth trajectory for Indian Economy
and for diminishing the daunting impact of the second wave of the
pandemic on economy, trade and industry would be crucial to support the
economic momentum in this extremely difficult time," said Aggarwal.
India's
economic growth in FY 2021 contracted (-) 7.3 per cent mainly due to
the stringent lockdown in two months of 2020 to contain the spread of
the virus. However, this statistical low base effect is expected to
provide a good opportunity for India to attain a double-digit growth
trajectory in FY 2022, said Aggarwal.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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