The Telegraph
Since 1st March, 1999
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Measure of confidence rebounds

New Delhi, Aug. 10: India Inc is brimming with brio once again.

The Federation of Indian Chambers of Commerce and Industry (Ficci) Business Confidence Index for the first quarter of 2003-04 leapt 12.6 percentage points to 71.3 from an earlier 63.3 on the back of strong industrial growth numbers, satisfactory advance of the monsoon and the clawback of the markets.

“There’s a strong undercurrent of optimism sweeping through India Inc,” said Ficci's survey of 573 companies, noting that the business confidence number of 71.3 in the first quarter of this fiscal was the highest value obtained in the last four quarters.

Other reasons attributed for the good cheer were the easing of war tensions in Iraq and successful controlling of the severe acute respiratory syndrome (SARS) epidemic.

The survey also shows improved sentiments brought out by the rise in the Current Conditions Index, which has registered a growth of 13.3 per cent at 68.2 from 60.2 in the last quarter.

The survey highlighted the fact that the astounding reception to the Maruti initial public offering (IPO) had turned the spotlight back on the primary market along with the hope of enhanced activity in the disinvestment process.

When asked about the most preferred mode of disinvestment, 9 per cent of the respondents voted for strategic sale, 31 per cent expressed their favour towards public offer of shares, and 60 per cent wanted disinvestment through strategic sale followed by public offer.

While 79 per cent respondents have rated the current overall economic conditions as “moderately to substantially” better against the last six months, 81 per cent respondents expected it to get even better.

A sectoral analysis of the survey showed that 79 per cent of the respondents rated the performance of the service sector “moderately to substantially better” in the last six months. Only 50 per cent in the last survey had rated it the same.

In case of heavy industries, 64 per cent of the respondents said current performance was “moderately to substantially” better vis-a-vis the last six months against 59 per cent the last time round.

Almost 43 per cent against 34 per cent of the respondents in the last survey felt that the light industry had performed “moderately to substantially” better vis-a-vis last quarter.

However, forecasting the performance of the services and heavy industry sectors for the coming six months, almost 91 per cent and 79 per cent of the respondents, respectively, feel they will perform well.

Highlighting the prospects for the next six months at the firm level, 75 per cent respondents expect “higher to much higher” sales. With intense market competition constraining the pricing power, only 15 per cent respondents are planning to raise prices against 25 per cent in the last quarter.

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