Get ready to shell out more as cos contemplate price rise

"Companies are willing to take this extreme step even at the cost of some compression in demand," said Ficci's latest business confidence survey (BCS) for the last quarter of 2009-10.

The survey drew responses from 325 companies with a wide geographical and sectoral spread.

About 37 per cent, nearly double --18 per cent -- of the previous survey, of the companies are going 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.

The participants said that the cost pressure, manpower cost and raw material cost, are not going to abate any time soon and companies are bracing themselves for a period of high inflation at least till the end of September 2010, Ficci said.

Inflation continued to remain at 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.

The survey also voiced the growing concern of the exporters about the rupee's appreciation against Euro amid the 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," Ficci said.