New Delhi, May 6: India Inc is not going to town on the high GDP growth rate projections for the economy. The government has forecast a 9.2 per cent growth for the fiscal, but as a Ficci survey shows, few companies expect higher profit and sales in the next six months.
Their business confidence, measured across three indices in the survey, has taken a beating in the fourth quarter of 2006-07. This happened for the first time in two years.
The companies are not upbeat over current conditions, expectations and overall business confidence — the three indices of the survey. The overall business confidence index in the fourth quarter stood at 69 against 75 in the third quarter.
However, for the future outlook, companies expect better performance at the enterprise level. A larger percentage of firms expect to export more, invest more and generate more employment in the next six months. Ficci surveyed 418 companies with turnover ranging from Rs 2 crore to Rs 50,000 crore. The segments covered were cement, pharmaceuticals, textiles, food and beverages, heavy equipment and machinery, financial services, paper, metal and metal products, chemicals and fertilisers, FMCG, IT, infrastructure, auto and auto ancillary, construction and real estate, steel and petrochemicals.
About 64 per cent of the respondents found the current overall economic conditions to be ‘moderately to substantially better’ than in the last six months. In the previous round of the survey, around 78 per cent of the respondents had reported likewise.
Expectations regarding the overall economic conditions for the next six months have also taken a hit. About 60 per cent of the participants expect the conditions to be ‘moderately to substantially better’ against 72 per cent in the last quarter.
About 68 per cent of the respondents said the current performance of their respective industries has been ‘moderately to substantially better’ compared with the performance in the last two quarters. Around 72 per cent of the respondents felt the same way in the previous survey.
Expectations regarding industry performance in the near future have also dampened with 61 per cent of the respondents reporting ‘moderately to substantially better’ performance of their respective industries over the next six months.