The rising cost of raw materials is the biggest hurdle for Indian industry as restrictions in many parts of the country have impacted the pace of economic recovery with disruptions in supply chains and contraction in demand, said a PHDCCI survey.

This industry survey was conducted by PHD Chamber of Commerce and Industry (PHDCCI) to assess the impact of the second wave of Covid-19.

Also read: PHDCCI calls for stimulus package to support economy as Covid cases spike

The survey, which was conducted across 34 sectors, revealed that 73 per cent of the respondents were struggling with the rising cost of raw materials. The other key challenges faced by businesses are availability of working capital (64 per cent), maintaining profitability (63 per cent), weakening of demand (62 per cent), and retaining the full workforce (61 per cent).

“The supply chain disruptions are causing huge surge in commodity prices which have severely impacted the price-cost margins of businesses in the difficult pandemic time of coronavirus,” said Sanjay Aggarwal, President, PHDCCI.

The survey said that 73 per cent of the companies are prioritising vaccination of employees as a key strategy to tackle the situation. Businesses are also focussing on increasing sales and the scale of operations, enhancing the competitiveness of their business, and cut costs of business operations.

According to the survey, 47 per cent of respondents rated the government’s relief measures to mitigate the effects of the pandemic at 7 out of 10, while 42 per cent rated the vaccination drive at 6 out of 10.

“Going ahead, a substantial stimulus to create effective strides for futuristic growth trajectory for Indian economy and for diminishing the daunting impact of the second wave of the pandemic coronavirus on economy, trade and industry would be crucial to support the economic momentum,” Aggarwal said.

India’s economy contracted by 7.3 per cent in the financial year 2020-21.

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