Corporates review prices

Steel prices to increase 4%; Car tags to rise 2%; Tractors rates to drop 3-4%.

A day after Finance Minister P Chidambram imposed a 2 per cent education cess on all taxes, companies in various industries were busy revising their prices.

After Maruti Udyog hiked car prices by 0.38 per cent yesterday, Mahindra & Mahindra on Friday raised the prices of its Scorpio by Rs 2,370, Bolero by Rs 1,800-1,900 and its three-wheelers by Rs 370. Ford has hiked the prices of the Ikon by Rs 2,500 and the Endevor by Rs 10,000.

It is learnt that the Tata Motors brass is meeting early next week to take a decision on the matter. Sources close to Tata Motors said new prices could be announced in a week's time.

General Motors India, too, is working out the implications of the cess, and is likely to come out with 2 per cent higher prices for its cars in another 2-3 days. Hyundai is also expected to effect price hikes between Rs 1,250 for the Xing and Rs 4,500 for the Sonata.

"The 2 per cent cess on Customs is not Modvatable. So, companies will at one time be paying cess on cess," an automobile industry source said, explaining why the education cess was forcing companies to jack up prices.

While Apollo Tyres on Friday hiked its prices by 0.48 per cent, leading consumer durable companies like LG, Samsung and Whirlpool said they were studying the matter carefully. Prices of man-made fibres, too, are expected to rise by 0.4 per cent shortly.

Leading producers of hot-rolled coil steel said they would raise prices by Rs 1,000 per tonne, thanks to the excise on the metal being hiked from 8 per cent to 12 per cent.

At the same time, personal computer prices are expected to soften by 5-10 per cent after the government's decision to abolish the 8 per cent excise duty on PCs.

It is worth noting that when the earlier government had cut excise from 16 per cent to 8 per cent in January this year, companies had dropped PC prices by 8-12 per cent.

Tractor prices are all set to come down by 3-4 per cent.