Finance Minister proposes, India Inc disposes
Chidambaram exhorted industrialists to cut prices in order to lure demand and boost growth, but India Inc gave a muted response. HT Correspondent reports. See graphics
Finance Minister P Chidambaram on Tuesday exhorted industrialists to cut prices in order to lure demand and boost growth, sweetening his appeal with the hint of a possible cut in excise duties. But India Inc gave a muted response.
Chidambaram also promised to examine the possibility of an excise duty cut.
He said cutting prices of products and services was a more prudent move than reducing costs through cutting production and retrenching employees. “That (cutting prices) is a much better option than allowing inventories to build up, non-performing assets, layoffs and retrenchment ... and digging a deeper hole,” he said.
“It is much better to keep your market share, keep your loyal workers with you, taking a price cut,” Chidambaram said.
Industrialists said they were not considering any immediate price cuts to tide over the crisis.
An analysis by HT showed that the real estate sector was operating with a net profit margin (net profits after tax expressed as a percentage of sales) of 49.6 per cent, followed by information technology firms (21 per cent) and metals (18.3 per cent ).
“Price cuts are unlikely to spur demand,” said Brij Mohan Lall Munjal, chairman, Hero Honda. “Minimum wages are
increasing, fuel price has increased..., so how do we bring down the prices of our products?”
Stay informed on Business News, TCS Q4 Results Live along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs