In­dia Inc Loses Faith

BT- C fore sur­vey shows Busi­ness Con­fi­dence In­dex has slipped be­low the 50 mark in the last quar­ter

India Today - - NATION - By Shravya Jain

The con­fi­dence lev­els among In­dia’s busi­ness­men have reached a new low. Ac­cord­ing to the lat­est Busi­ness To­day- C fore sur­vey for April to June 2012, the Busi­ness Con­fi­dence In­dex ( BCI) has slipped to 49.3 on a scale of 100.

When the first sur­vey was con­ducted for the first quar­ter ( Jan­uary to March) of 2011, the con­fi­dence lev­els stood at 74.8. By the time of the last quar­ter, of Jan­uary- March 2012, it had slipped to 55.4. This fall in the con­fi­dence in­dex to be­low the psy­cho­log­i­cally pos­i­tive 50 mark is wor­ry­ing, as it sig­nals a fall in hir­ing and ex­pan­sion in the econ­omy.

The sharpest de­cline in the con­fi­dence lev­els is ac­tu­ally among the small busi­nesses, where it has fallen from 57.2 from the pre­vi­ous quar­ter to 50.5, on a scale of 100. Sec­tor­wise, the heavy engi­neer­ing in­dus­try ap­pears to be the most pes­simistic, scor­ing just 48.3 points.

Busi­ness­men have of­ten com­plained of the “pol­icy paral­y­sis” in the UPA Gov­ern­ment, which has led to the prob­lems cur­rently faced by in­dus­try, of high in­ter­est rates, de­lays in project ap­provals, and un­cer­tain land ac­qui­si­tion poli­cies. Nearly 53 per cent of the 500 chief ex­ec­u­tive of­fi­cers and chief fi­nan­cial of­fi­cers polled have said that their profit mar­gins were squeezed in the April to June quar­ter of 2012, and a mas­sive 57 per cent of them ex­pect the prof­its to fall fur­ther in the cur­rent quar­ter of July to Septem­ber. Nearly 59 per cent ex­ec­u­tives say they do not ex­pect their sell­ing prices to pick up even though cost of raw ma­te­ri­als has risen sub­stan­tially.

With no ma­jor re­forms hav­ing been an­nounced by the UPA Gov­ern­ment so far, the sit­u­a­tion for the next quar­ter looks grim. Nearly 80 per cent ex­ec­u­tives polled in the sur­vey do not ex­pect de­mand to pick up in the July- Septem­ber quar­ter. Forty­five per cent ex­pect the over­all eco­nomic sit­u­a­tion to worsen.

Re­cently, top cor­po­rates bosses like Ratan Tata and Azim Premji ex­pressed hope that Prime Min­is­ter Man­mo­han Singh would push through pos­i­tive eco­nomic re­forms, start­ing with the con­tentious is­sue of for­eign di­rect in­vest­ment in multi- brand re­tail. He needs to de­liver, if the mood of In­dia Inc has to be lifted from gloom and doom.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.