India Inc's optimism on the wane, recovery elusive: Ficci

Near-term expectations of respondents also noted some restraint in the current survey

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, according to a poll conducted by industry body Ficci.

The participating companies did not report much improvement in the current conditions vis-a-vis the last six months at the economy as well as company level, while a smooth implementation of policies on ground level will be vital to further improve the confidence, the survey found.

Stating that the build-up in confidence noted since the Modi government assumed office in May last year has been encouraging, Ficci said 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.

At the economy level, the number of respondents citing 'moderately to substantially better' performance vis-a-vis last six months declined to 66% in the present round from 7% stating likewise in the previous round.

"This perception of respondents finds ground in the actual economic data as well as a firm rebound in the economy still remains elusive," Ficci said on the results of the poll.

Further, the near-term expectations of respondents also noted some restraint in the current round of the survey.

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.

Nonetheless, a slight increase was noted in proportion of respondents indicating improved conditions compared to last six months at the industry level.

At the industry level, 71% of the respondents cited a better performance in the coming six months in the present round, against 87% in the previous survey.

Besides, the corporate results for the first quarter of this fiscal year indicated weak performance owing to a host of domestic and global factors.

The companies participating in the survey belonged to sectors like steel, food processing, paper, plastic, oil and gas, electrical machinery products and infrastructure.

"The capacity utilisation rate of companies remains low with about 50% of the participants reporting that they are operating at below 75% capacity. In addition, results with regard to operational parameters indicate mixed signs," Ficci said.

The proportion of respondents anticipating an increase in investments, profits and employment saw an increase in the latest survey, but this was offset by an increase witnessed in the proportion of participants foreseeing worsening for these parameters.