New Delhi: Finance minister P Chidambaram today asked the industry to be more competitive and hold the price line.
“There is a lesson for the manufacturing sector. You have to become more competitive and hold the price line,” Chidambaram said during his post-budget interaction with industry body Ficci, while pointing out that contribution of the manufacturing sector to inflation is not insignificant.
He said the industry would hurt itself in the long run if it exploits short term supply-demand mismatches.
When there are pressures brought on by growth and high commodity, oil and food prices in the world and slowing down of consumption, industry should rise to the occasion and become more competitive and more efficient to hold the price line, he said.
The finance minister in particular appealed to industries like pharma, two-wheelers, auto, buses, chassis and paper, which have benefited from deep fiscal cuts announced in the Budget to hold the price line and try to lower them if possible.
“Expand volume of production and gain in volume what you might lose in not increasing prices” he said.
Exuding confidence that demand will definitely rise in FY 2008-09, the finance minister said, it is for the industry to take a challenge and produce goods and services to meet the rising demand.