Rupee depreciation, inflation, interest rate hike by RBI have
acted as a triple whammy for businessmen and consumers alike. This is hurting
the Goenkars and unfortunately there doesn’t seem to be any respite in sight
for them.
Dilip Naik, a businessman said that due to
the inflation, cost of living is increasing and it is pinching everybody hard.
“Oil prices have increased due to which prices of commodities have also
increased. We are struggling to survive. Our profit margin, which was already
narrow, has shrunk further. We have to buy imported raw materials from our
suppliers to make our products. But our customer is the government and it has
not increased the rates,” Naik said.
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In contrast, suppliers keep on increasing
the prices. Due to this, the load of rising cost can’t be passed on to the
consumer and it has to be solely borne by him.
“While many private entities are passing
on the impact of rising costs to the customer, we are unable to do so. Due to
this our profitability is going down. The ease of doing business is also
becoming difficult with passage of time. The raw material costs are increasing,
gas prices are increasing. If the rupee continues to decline like this and the
prices of the imported raw material keep on shooting the way it is happening
now, then going ahead we will find it extremely difficult to survive in the
market,” he said.
This does not augur well for the future of not only our business
but the overall economy of our state and the country as a whole. The government
has to step in and take corrective measures. It has to focus on stemming the
declining economy, he added.
Entrepreneur homemaker Rupa Naik said that it has become
extremely difficult for her to manage her business and home due to the rising
inflation.
“While on one hand the business profitability is not increasing
because of the rising cost of production, on the other hand growing inflation
is making it difficult for me to manage my household expenses. I’m finding it
difficult to run my house because whatever little revenue is generated from the
business, is nullified by inflation,” she said.
She added that as a homemaker one has to do the monthly
budgeting of the household at the start of every month.
“But as time is passing by, we’re forced to slash many of our
expenditures which are essential in nature but we are not able to afford it
like in areas of healthcare and education. If this trend continues it will make
things very difficult for me to do a balancing act between my business and home
as both are interdependent on each other,” she said.
Garment trader Pramod Sawant said the lower middle class is
finding it extremely difficult to survive especially in the post COVID era.
“We had hoped that the government would reduce the cost of
consumer products and the essential items instead of that the cost of fuel is
increasing cost of fuel that is resulting in overall inflation hurting us. Cost
of production has increased but the consumer is not ready to buy products at
increased cost due to which we have to continue to suffer losses as we are
unable to pass the impact of price rise onto the customer,” Sawant said.
He said that the Government has to give some subsidies like
deferred interest payment, reduction of the GST rates and many other similar
measures.
“The GST has broken the back of small traders as it was
hurriedly brought in. There is no regulation on the rates. The small
businessmen should be given some relief packages. There is a loan waiver for
big businessmen but nothing for small traders and farmers,” he lamented.
CEO of Sapna Technologies Nilesh Nayak said that although his
company is an IT firm and trades in pounds the rupee has depreciated visa-a-vis
pounds also along with dollar. This is linked to inflation and various other
issues.
“Due to this, the travel expenses are going up. Businesses are
seeing difficulty in getting funds from venture capitalists. Due to the crash
in the share market, raising capital has become extremely difficult. Due to the
increase in EMI rates, many companies are finding it extremely difficult to
repay loans on various equipment and other aspects of business. Those who are
paid in dollars are benefiting but at the same time the quantum of work will
come down. Fact remains the rise in costs will have a negative impact on a lot
of startups, which will have to either close down or scale down their
operations,” Nayak said.
Principal of Indian institute of Hotel Management Goa, Samir
Mehta said that inflation has hit multiple aspects of the hotel business.
“The economy is still not out of the COVID grip. The attrition
rate in the hospitality sector has not changed. On top of that, we now have
this inflation situation and continuous depreciation of the rupee. The bottom
line of every hotel is affected,” he said.
From
an education perspective, he said that the budget of students has gone haywire.
“I run a hotel education institute and provide high quality practical exposure.
But it needs substantial investment. While we are not compromising on quality,
inflation is eating away our revenues, which is already hit due to the COVID
pandemic. Unless some urgent measures are taken to cool down the prices the
situation may spiral out of hand and can cause serious issues for all stakeholders
in the economy,” he said.
