E-Paper
Corp India's confidence low for second quarter: CII
Corporate India's confidence has been dampened for the second quarter of this fiscal owing to global economic uncertainties and high interest rates, says a CII Business Outlook Survey.
Corporate India's confidence has been dampened for the second quarter of this fiscal owing to global economic uncertainties and high interest rates, says a CII Business Outlook Survey.
The dip in business confidence is also evident from the fact that most of the firms surveyed by the CII do not plan to increase their investment.
The Business Confidence Index for July-September quarter of 2011-12 has declined by 8.9 points compared to a drop of 4.2 points in the preceding quarter, it said.
"The top two business concerns are high interest rates, followed by high raw material costs," it said, adding that the global economic uncertainty, inadequate skilled labour and infrastructural shortages are other areas of worry for the industry.
Out of the 250 companies which participated in the survey, the majority expected that overall input costs will remain high.
"The impact of the global economic downturn as well as domestic factors are generating uncertainty about the economic outlook," it said.
About 30 % of those surveyed said that the Indian economy may grow by 7.5-8 %, while average inflation during 2011-12 would be above 8 %.
However, most the firms covered in the survey expected sales, production and new orders to increase in the second quarter of 2011-12 after witnessing stagnation in the first quarter.
The domestic worries before the industry include near double-digit inflation, the high cost of borrowing and a slowdown in GDP growth.
The debt problem in Europe and uncertainties in the US economy added to the worries for the domestic economy. However, so far, exports have done well, growing by 53.98 % to $ 108.34 billion between April and July this fiscal.
