Increasing costs of raw materials affecting MSMEs: PHD Chamber

New Delhi, May 18 (KNN) The increase in costs of raw materials is affecting the MSMEs which are already struggling because of pandemic impact and squeezed working capital, said Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry.

In a statement on Monday, Aggarwal said that the spike in WPI inflation at 10.49 per cent in April 2021 from 7.39 per cent in March 2021 is majorly due to skyrocketing commodity prices, which have escalated the overall WPI inflation in the double digits and have severely impacted the price cost margins of the businesses in the difficult pandemic time of coronavirus.

''WPI inflation of the manufactured products has increased to 9.01 per cent in April 2021 from 7.34 per cent in March 2021. The increase in costs of raw materials is affecting the MSMEs which are already struggling because of pandemic impact and squeezed working capital,'' he added.

WPI inflation of the food articles has increased to 4.92 per cent in April 2021 from 3.24 per cent in the month of March 2021. We expect that the prices of food articles will soften and food inflation will be in the benign conditions in the coming weeks with improved supply chains, he said.

He further said that as WPI inflation of fuel and power has increased to 20.94 per cent in April 2021 from 10.25 per cent in March 2021 which is significantly increasing the input costs of the industry and its competitiveness in the domestic and international markets.

''At this juncture, we urge the government to consider petroleum products in the ambit of GST to rationalize the prices and to contain the rising inflation,'' he added.

High commodity prices are posing a serious challenge to the businesses to operate in the difficult pandemic times, which needs to be addressed immediately through the adequate reforms in the supply chains of high commodity prices, said Sanjay Aggarwal.