From everyday items like soaps and shampoos to TVs and air conditioners, the prices have gone up by 10-15 per cent in the last one year. Supply disruptions due to the Covid-19 pandemic led to an increase in the cost of raw materials and logistics, which increased the cost of these things. Due to the sharp rise in prices, the revenues of the makers of these items grew in double digits but margins were badly affected.
Rising pace of vaccination, pent up demand, improving consumer sentiment and festive season boosted demand, but now it is showing a sluggishness. Apart from this, the demand for work under MGNREGA is still high, which indicates that unemployment is still on the rise and demand is not high in rural areas. This will have an impact on consumption in the coming days as well. Companies are hopeful that the government will solve the problem of rising raw material prices. This will enable them to take back the increased prices. This has affected the demand especially in rural areas.
increase in input cost
Input cost has increased by 20-30% during the last one year while prices have risen by 10-15%. The sharp rise in prices led to a fall in demand, especially in rural areas. Smartphone prices rose by 8 per cent during January-June and 7 per cent during July-December. Similarly, the price of laptops increased by 30 per cent in the first half of the year and 20 per cent in the second half.
Similarly, the price of washing machines increased by 18 per cent in the first half and 7 per cent in the second half. Similarly, the price of ACs increased by 21 per cent in the first half and 10 per cent in the second half. Refrigerator prices rose by 12 per cent in the first half and by eight per cent in the second half. FMCG, or items of daily use, grew by 22.5 per cent in April-June, 10.8 per cent in July-September and 8-10 per cent in October-December.
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