Ficci survey reports fall in India Inc's business confidence - by anibaba99
India Inc's business confidence has dipped drastically in the past six months. A survey by the Federation of Indian Chambers of Commerce and Industry (Ficci) attributes this to high interest rate regime, appreciating rupee, and rising cost of industrial inputs.
The survey was conducted for the three-month period between October and December 2007.
Nearly half of the 392 companies surveyed by Ficci said overall economic conditions have deteriorated in the past six months. In the last survey, for the period between July and September 2007, only 19 per cent of the companies had said so.
Nearly 40 per cent of the participants believe the current economic conditions will continue in the next six months. The rest expect it to weaken further.
"The overall business confidence index has recorded a decline from 61.2 in the last survey to 55.3 in the present one," a Ficci release said.
The companies surveyed had a turnover ranging from Rs1 core to Rs 50,000 crore, largely from sectors that include cement, pharmaceuticals, textiles and apparel, leather, FMCG, heavy equipment and machinery, financial services, paper, metal and metal products, chemicals, infotech, auto, and steel.
Participants in the survey said they had no choice but to increase prices of goods they produce in the coming months.
However, the survey found that investment forecast remains strong.
As many as 54 per cent of the participants, especially in heavy industry, said their investments are likely to increase, as compared to just 33 per cent in the previous survey.
The survey also found that the profit outlook is not bright in the future. As many as 36 per cent said they expect a dip in profits; especially the companies in light and heavy engineering industries.