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Indian companies are not that upbeat about economic recovery in the coming months in the first quarter of the current financial year, compared with their mood in the last quarter of the previous year, according to a survey by industry chamber Assocham.
The Bizcon Survey for June revealed that only 54.8 per cent of respondents were hopeful of improving economic conditions in the coming months, against 82.6 per cent in the last such survey in March. This was also a long way off from the 79.2 per cent of respondents predicting the economic situation to improve only six months ago in the quarter ended December 2014. As for the present scenario, 61.5 per cent felt the situation to be more or less the same vis-à-vis 56.5 per cent in the March survey.
Interestingly, 58 per cent had positive expectations from their respective industries. And 64.5 per cent expected the same from their own firms. Both these figures showed an increase of two and four percentage points, respectively, from those in March.
The survey ascertained the levels of performance and expectations by firms regarding 11 key parameters of economic growth such as profit, sales volume, employment, investments, etc. Forty-two per cent of respondents said profit margins remained the same during the April-June 2015 quarter. However, survey results indicated 45.2 per cent of respondents felt their profits will increase in the short term, which is what 43.5 per cent of respondents had said last time as well.
In spite of a majority hoping for increasing volume of sales during the last survey, this time, 38.7 per cent of the respondents stated there was no positive change in sales volume during April-June 2015. However, a resounding 58.1 per cent still expect it to increase in the July-September period.
The picture of employment is again gloomy, although the gloom has receded a bit. In the previous survey, 51.6 per cent had stated no change in employment figures for April-June 2015. Now, 38.7 per cent said so for the July-September 2015 period.
The survey delivered a blow to the government's plans to revive investments, with a majority of respondents believing no change in investments will take place in the domestic or the international space.
Companies also prescribed a healthy dose of infrastructure development as the most important measure to help revive industrial growth. In the order of importance given, the next most important measures are effective policy reform, project clearance, reduction in borrowing costs and a stable exchange rate.
