India Inc gives mixed signals about the business sentiment in the country

New Delhi: Industry associations surveys are giving mixed signals about the business sentiment in the country. Industry chamber Ficci in a survey on Sunday found that India Inc’s optimism about the country’s economic recovery has dipped to the lowest level in six quarters and a firm rebound in the economy remains elusive.

This is in contrast to CII ASCON survey released earlier this month which had said that the economy is showing a recovery, albeit a slow one on the back of continued policy actions. However, both surveys do indicate that India is still away from a full blown recovery.

CII had said that there are fewer sectors anticipating negative growth and there has been a significant and perceptible positive movement in percentage points recorded by many of the sectors which were in moderate and negative growth category a year ago.

Meanwhile, Ficci said that the build-up in confidence noted since Modi government assumed office last year has been encouraging, however the same momentum needs to be sustained going ahead. The Ficci Business Confidence poll — which sought responses from about 130 companies with a turnover ranging from Rs 6 crore to Rs 92,000 crore to gauge their expectations over the period July to December 2015 — saw the index value slipping to 66.3 as against 73.2 in the previous round.

The participating companies did not report much improvement in the current conditions against the last six months at the economy and firm level, said the industry body said. At the economy level, the proportion of respondents citing ‘moderately to substantially better’ performance vis-a-vis last six months declined to 66 per cent in the present round from 73 per cent in the previous round.

“This perception of respondents finds ground in the actual economic data as well; a firm rebound in the economy still remains elusive. Nonetheless, a slight increase was noted in proportion of respondents indicating improved conditions compared to last six months at the industry level,” said Ficci. Further, the near term expectations of respondents also noted some restraint.

In the current round, Ficci pointed out that even though a majority of respondents said that “they anticipate a ‘moderately to substantially better’ performance over the next two quarters, the proportion of companies that hold this view has moderated when compared to the previous survey round.”