Economic scenario worsens for India Inc: FICCI Press Trust of India New Delhi, April 27, 2008
As much as half of Indian corporates, surveyed by industry body FICCI, have said the overall economic conditions have deteriorated in the last six months with high interest, appreciating rupee and rising cost of raw materials playing the spoilsport.
Only 19 per cent of the firms had given a dismal view about the state of the economy in the last FICCI survey. The overall Business Confidence Index has recorded a decline from 61.2 in the last survey to 55.3 in the present series.
"India Inc is deeply concerned over the evolving economic situation with growth slowing on one hand and inflation rising on the other hand. Companies from across the sectors have reported rising prices of industrial raw material as a serious concern with regard to their business performance," FICCI said.
The survey for the third quarter of fiscal 2007-08, conducted in March, received responses from 392 companies. Companies covered in the assessment had a wide range with turnover between Rs one crore and Rs 50,000 crore. The industries included cement, pharmaceuticals, textiles, FMCG, apparel, leather, heavy equipment and machinery, financial services, paper, metal and metal products, chemicals, IT, automobile auto ancillary and steel.
Industry expectations for the coming six months are also not optimistic. While 38 per cent believe that the current economic scenario will stay over the next six months, close to a third felt that things would turn worse. The 'Expectations Index' has moved down from 62.2 in the last round to 55.7 in the current series.
However, the silver lining lies in the fact that nearly 54 per cent of the participating firms reported that their investments are likely to increase in the coming six months.
This figure is much higher when compared to the corresponding figure of 33 per cent obtained in the previous survey.
Further, this improvement in the investments...