Expectations of increase in investments and improvement in capacity utilisation have moderately boosted the business confidence of Indian corporates, a CII report said.
“Compared to a value of 62.5 in the first quarter of 2011-12, the index reported a value of 55 in April-June, 2012,” the chamber said in its report.
Out of 200 respondents, about 42% said India’s economy would grow by 7-7.5% during 2012-13. About 29% expects inflation in 2012-13 to fall to below 7%, from 8.8% in 2011-12, it added.
“...respondents expect to increase domestic investments during April-June 2012...58.7 % expects capacity utilisation to be above 75% in the first quarter of 2012-13,” it said. It said there was an increase in overall sales, new orders and pre-tax profits in the last quarter of 2011-12 and these indicators are expected to continue increasing in the first quarter of 2012-13.
“Most firms kept employment levels unchanged in the quarter ending March 2012 but are expected to increase employment in the quarter ending June 2012,” the report said.
However, it said that rising input costs continues to be a major worry for firms. Similarly, it said, a worrisome trend has emerged on the back of tight monetary conditions.
Majority of the firms registered a stagnation or decline in availability of credit during January-March 2012, it said.