India Inc not to raise output prices

New Delhi, Feb 11 (UNI) The India Inc is not expected to increase output prices following the rise in input prices, giving respite to the common man, who is feeling the brunt of inflation, which rose to its two year high of 6.58 per cent.

A majority of the 320 companies, surveyed by the Federation of Indian Chambers of Commerce and Industry (FICCI), have said although rising input prices are a matter of concern, they will continue to absorb it rather than passing the burden on to consumers.

The Third Quarterly Business Confidence Survey for the current fiscal, revealed a weak outlook on investments due to spiraling capital goods prices coupled with the rising cost of credit. The investment index plunged from 50 in the previous quarter to 39 this time. ''Lower investments in the near future may have a long-term impact of slowing down the economy,'' the survey cautioned.

Only 45 per cent of the respondents expected higher investments to take place, in comparison to 54 per cent in the last survey.

The overall business confidence index, however, rose three points to 75, as against 72.1 in the previous quarter. This was due to the strengthening economic profile of the country, the report said.

The sales index registered a two point increase from 74 in the previous quarter to 76 this quarter with nearly 78 per cent of the firms reporting higher to much higher sales over the next six months.

The survey indicated the government's move to undertake reduction in customs duty on items used as industrial inputs and as capital goods was on the right track. ''It is time for the government to move full steam on structural reform measures that would bolster the supply side,'' the survey stated.

UNI