India’s GDP will fall more than 4 per cent in FY 2020-21 feel over 35 per cent of respondents in a Business Confidence Index (BCI) survey by the Confederation of Indian Industry (CII).
But 8 per cent feel that GDP growth could be positive in FY21.
More inflation in offing
In the ‘112th Business Outlook Survey’, nearly half of the respondents (46 per cent) feel that inflation may inch up further in the current financial year, while about 28 per cent feel that it may remain unchanged from the current levels.
Conducted during August-September 2020, the survey covered more than 150 firms of varying sizes. Major proportion of the respondents (37 per cent) belonged to large-scale firms, while around 26 per cent belonged to small-scale enterprises and around 19 per cent to micro and 18 per cent to medium scale firms.
“Around 37 per cent feel that RBI will keep policy rates unchanged in the remaining part of FY21. The continued strain on economic activity due to the pandemic is dissuading the RBI from raising rates despite inflation overshooting RBI’s target range for the fifth consecutive month,” said the survey.
The survey is based on sample survey of firms covering all industry sectors, including MSMEs from different regions. It also enumerated responses across industry groups both in public and private sectors engaged in manufacturing and services sector.
Getting back to normal
According to the survey, nearly 30 per cent of the respondents said that business activity may return to the pre-pandemic levels by Q1 FY22, while 23 per cent feel that it will return only after H2 of FY22.
About 70 per cent of the respondents who took part in the survey represented the manufacturing sector, while 24 per cent were from services sector and 3.2 per cent, 1.9 per cent and 1.3 per cent, respectively, belonged to the agriculture, mining and utilities sector.
“More than 40 per cent of the respondents have indicated that a majority of their workforce (more than 75 per cent of the workers) has already returned to the workplace, while another 22 per cent of the respondents anticipate their return by the next quarter,” said the survey.