Bhubaneswar: Even as household budgets have gone awry over rising prices, and Odisha’s retail inflation has spiralled to 4.83% in July, business stakeholders fear that sustained price pressures could further push up input and operating costs, squeezing margins for businesses, particularly MSMEs.Provisional consumer price index (CPI) data released recently by National Statistical Office (NSO) under the ministry of statistics and programme implementation (MoSPI) has put Odisha’s combined CPI at 107.06 in July. State’s inflation is marginally above the national average of 4.45. Price pressures were considerably higher in rural areas than in urban centres, with rural Odisha recording inflation of 5.12%, compared with 4.02% in urban areas.Economists said the pace of increase is significant, given that Odisha’s retail inflation was as low as 1.87% in Jan before rising to around 5% in May and moderating slightly thereafter. The sustained increase has raised concerns not just about household purchasing power but also about the cost of doing business.Food prices have emerged as a major driver, with immediate impact being felt in household food budgets, particularly for middle class and lower income groups.Associate professor of economics at NISER Amarendra Das attributed the rise primarily to two factors. “Fuel price hikes have spilled over into transportation costs for food and other essentials, and this is now being reflected in retail prices. Second, heavy rain and floods have affected crops not only in Odisha but also in other states on which we depend for vegetables and grains,” he said.The impact is evident in the prices of daily essentials. Sudhakar Panda, general secretary of Odisha Byabasayee Sangha, which represents wholesale and retail traders, said the cost of putting basic food on the table had risen by 5% to 7% over the past two to three months. “The increase is evident in prices of vegetables, basic groceries and LPG cylinders. Our monthly grocery bill was around Rs 6,000-7,000 till March, but it has steadily risen since then, and I am now paying around Rs 8,000-8,200 for almost the same quantity of food items. Even the monthly milk bill has risen to around Rs 1,800 from about Rs 1,600 till May. We cannot cut down on kitchen staples, so we are cutting down on ordering food and taking public transport on some days instead of using our personal car or cabs to make room for these additional expenses,” said Pranati Patro, a homemaker.At present, barring potatoes, most vegetables are selling at Rs 50 to Rs 80 a kg. “Except during winter, Odisha depends on supplies from across the country to meet its vegetable demand. Everywhere, rain has affected crops, and what has compounded the problem this time is the fuel price rise,” Das said.The inflationary pressure, however, is not confined to household budgets. While the CPI data do not provide sector-wise inflation figures, industry stakeholders said higher prices of raw materials, transportation and financing could increasingly push up the cost of doing business, with MSMEs particularly vulnerable.MSMEs are among the state’s biggest sources of employment outside agriculture and form an important part of Odisha’s manufacturing ecosystem. Odisha Assembly of Small and Medium Enterprises secretary general Satwik Swain said large companies may have greater ability to absorb temporary increases in input costs, but smaller units operating on thin margins have much less room to absorb sustained increases.Rising inflation has pushed up raw material costs, particularly for textile and apparel, food processing and plastics units. Swain cited the example of garment units in Bhubaneswar and Cuttack, saying a unit that purchased fabric at around Rs 100 per metre in the previous quarter is now paying Rs 110-115. “But they cannot increase their selling prices at the same pace,” he said.For MSMEs, the pressure is compounded by their dependence on working capital. Businesses relying on cash-credit limits and working-capital loans need a steady flow of funds to buy raw materials, maintain inventories and pay wages. Swain said some MSMEs were now paying 1.5-2 percentage points more in interest, leaving less money available for day-to-day operations.