The Hindu Business Line : Current Conditions Index up: FICCI survey

According to the Federation of Indian Chambers of Commerce and Industry (FICCI) Quarterly Business Confidence Survey (BCS) for the quarter, the Current Conditions Index has attained a new high. The index while maintaining its presence in the `optimistic' zone, has gained 2.5 per centage points, going up from 73.2 points in the last survey to 75.

In fact, for the first time, the index has surpassed the value of the Expectations Index that stood at 73.4 points, as per the survey. It is notable that 43 per cent of the respondents feel that the ongoing economic and industrial performance would continue for the next three quarters. While 33 per cent felt that the high growth being witnessed would be sustained for the next four quarters, another 22 per cent see the same happening for the next six quarters.

Services sector is the most optimistic with regard to its current and expected performance, the survey revealed. The recovery in the light industry continues. However, respondents from the heavy industry have reported a slowing down of performance.

The survey elicited response from 504 companies. The turnover of the companies who participated in this survey ranged from Rs 1 crore to Rs 10,000 crore. Respondents to the survey represented a wide array of activities and include sectors like cement, FMCG, telecom, IT, BPO, paper, metal and metal products, auto and auto components, food and beverages, chemicals and pharmaceuticals, textiles, heavy equipment and machinery, travel and tourism, construction and real estate, petro products and financial services.

Dr Amit Mitra, Secretary General, FICCI, at a press briefing said, the present round of business confidence survey was conducted during the period when the country's economy and industry were showing visible signs of a marked improvement in their performance, the stock markets were buzzing with activity with the Sensex crossing the 6,000 mark and the forex reserves crossed the psychological $100 billion figure. The period of the survey also coincided with the Parliament being dissolved and the country gearing itself up for the next round of Lok Sabha elections.

Further, members of corporate India were extremely bullish on the sales front for the next six months, the survey revealed. Positive sentiments are maintained with regard to both profits and exports. With increase in capacity utilisation, new investment plans are taking shape, as per the survey. However, the corporates were conservative in their forecast for price realisation.

The trend with regard to employment continues and no significant jump is likely to be seen in the number of people on corporate payrolls in the next six months. Factors most frequently cited for limited increase in the headcount include cost considerations, productivity and efficiency improvements, archaic labour laws and increased automation.

Further, the recent reduction in the peak customs duty and removal of special additional duty (SAD) have been welcomed by 90 per cent of the respondents. While 79 per cent have lent support to a further reduction in customs duty in the coming years.

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