Price rise again?

The new car that you were eyeing for a long time could become costlier soon. You may be forced to shell out more for your daily morning cupp...

The new car that you were eyeing for a long time could become costlier soon. You may be forced to shell out more for your daily morning cuppa. Yes, there are ominous signs on the industrial horizon where dark clouds of price hikes are gathering again.

Prices of many items have shot up in the last six months, giving a severe headache to the government, industry and consumers in general. The casualty could be the overall economic growth. The bone of contention last week was the steel price rise ahead of the elections. Steel companies, which just came out of a long recession, had already made several rounds of price hikes. Now with steel-consuming industries like auto companies up in arms against the steel price hike, the government was forced to step in and effect a cut.

The cut has happened, but this may not be long-lasting. Frighteningly, it is not steel alone. Even cement prices have quietly shot up in the last six months. Result: construction costs have been rising. This sour note continues with sugar prices going up in many parts of the country. Even the government expressed concern over the high prices of sugar and favoured putting in place a mechanism to curb the upward trend including release of additional quantities in places where prices are still high.

Adding to the worries, even edible oil prices have gone up in some areas recently. These price hikes may not have reached alarming proportions. Not yet. But it could add to the overall inflation worries. Inflation is hovering around six per cent, though the RBI stubbornly maintains the 4.5 per cent target for the year. Whether India will retain the shine after all remains to be seen.