NEW DELHI: Demonetisation is no longer keeping Indian firms bogged down, the latest Business Confidence Survey released by Ficci on Sunday shows. According to 54 per cent of the respondents from the corporate/industry sphere, the current economic conditions are much better than six months ago. Besides, 79 per cent feel the country’s economy will do even better in the next six months.
The report, however, cautions that while global growth is improving gradually, the rising tide of protectionism could impact Indian industry’s export performance.
Sixty-five per cent of the companies surveyed expect better sales performance during April-September 2017, while 42 per cent expect profits to increase. The survey also notes that 40 per cent expect to invest more than their current investments levels. Twenty-seven per cent of the companies surveyed plan to hire more number of employees.
“The confidence level has seen a rebound, touching an eight-quarter high, vis-a-vis a drop seen in the previous survey wherein confidence was hit due to a demand squeeze caused by demonetisation,” states the report
However, 39 per cent of the participating companies reported that the cost of credit would still be a concern against 43 per cent in last survey.
Despite a slew of measures by the Reserve Bank of India and the government to moderate the lending rates, 67 per cent of the participants responded that the initiatives have not benefited them at all. “This indicates that a large set of companies is not getting the benefit of credit flow at lower rates,” states the survey.
RBI had cut the repo rate by 175 basis points between January 2015 and October 2016; the interest rates on small saving scheme were reset and marginal cost of funds based lending rate was introduced last year.
The quarterly survey is conducted by Ficci among members from across sectors.