Firms should list products’ manufacturing cost with MRP: RBI board member

In a unique suggestion, an RBI central board member said Friday a company should disclose the manufacturing cost of a product along with the maximum retail price so that a consumer gets to know the margins the company is pocketing. Satish Marathe, appointed by the government to the central board of the RBI in August, said, it is high time that apart from printing MRP on products, companies should also start giving the (manufacturing) cost of products. Only then, will we really know the margins of profit. He sought to drive the point of excess profits being made by companies, saying a piped gas company recently signed an agreement to supply gas to residential areas at a 16 percent margin. Admitting that such a high margin could be justified in initial days, he wondered how can it be justified once volume picks up and also rued that consumer movement is only at a nascent stage in the country. Wondering whether any country has benefited from free-trade pacts, he called for the need to take a relook at free trade agreements to better protect the interest of the domestic industry. He also said the state-run banks under prompt corrective action will eventually come out of the restrictions imposed on them.

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