The Federation of Indian Chambers of Commerce and Industry (Ficci) yesterday expressed the optimism that the slow down in the current financial year will reverse by the end of the current of the financial year. The chamber forecast the industry to grow by about 11 per cent in the first quarter of the next fiscal.
A business confidence survey conducted by the chamber, covering over 175 corporates, indicated that the slow down is a temporary phenomenon.
The corporates felt the current downtrend will be reversed by the combined effect of the 1997-98 budget, the new credit policy and the relaxation of the external commercial borrowings, besides the other steps taken by the government.
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The Ficci study is based on assumptions like the climbing down of the rate of borrowing to 17 per cent from 18 per cent, an inflation rate of 6 to 7 per cent and money supply at about 16 per cent.
A Ficci release said that 80 per cent of the respondents based their rationale for bottoming out of the slow down to the lag effect.
They felt the spin-off of the policy measures announced recently will begin to show after eight months.
Fourteen items, having a weight of 21.42 in the index of industrial production, are likely to lead this up-trend in the industrial activity. Thes include saleable steel, cement, fertilisers, pig iron, sugar, cloth, yarn, commercial vehicles, cars, jeeps, motor cycles, auto rickshaw and scooter and mopeds.