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High cost of inputs to impact demand, production possibilities: PHD Chamber

The drivers of household consumption need to be further strengthened to enhance the aggregate demand

High cost of inputs to impact demand, production possibilities: PHD Chamber

Photo: PTI

High cost of inputs, skyrocketing global commodity prices, shortage of containers and unavailability of some raw materials, such as semiconductors, will have an impact on the demand and production possibilities in the coming months, industry chamber PHDCCI said on Sunday.

PHDCCI President Pradeep Multani said the prices of the basic raw materials have increased by more than 50 per cent during the last one year and they are posing a challenge to the small businesses to operate as it impacts cost of production and affects competitiveness in the domestic and international markets.

At this juncture, he said there is a need to address the high commodity prices and shortages of raw material to support the consumption and private investments in the country.

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“Although the economic activity remained intact in September, high cost of inputs vis-a-vis skyrocketing international commodity prices, shortages of containers and unavailability of some raw materials, such as semiconductors, will have an impact on the demand and production possibilities in the coming months,” he said.

He added that the drivers of household consumption need to be further strengthened to enhance the aggregate demand as it will have an accelerated effect on expansion of capital investments.

More and more direct benefit transfers need to be considered for the urban and rural poor under various welfare schemes in addition to the free distribution of dry rations till Diwali, Multani suggested.

Vaccination of the population should be continued at a faster pace, he added.

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