Signalling a firm economic revival, 45 per cent of micro, small and medium enterprises (MSMEs) say they have registered an increase in turnover in the second quarter, ended September 30, of the current financial year.
A survey conducted by Confederation of Indian Industry (CII) revealed that 42 per cent of MSMEs have seen an increase in their production and 38 per cent in their order bookings in the second quarter as compared to the first quarter of 2009-10.
In the first quarter, the survey had revealed that 42 per cent and 43 per cent of respondents had registered a decline in their turnover and profitability, respectively, compared to the last quarter of the previous financial year (2008-09).
A higher percentage of respondents have also registered growth in their turnover, inventory and order books in the second quarter as compared to the first quarter.
“It seems that the worst of the crisis period is over and a turnaround seems to be in sight for most of the industry,” said Salil Singhal of CII’s national MSME council.
More, a majority of respondents feel optimistic about the third and the fourth quarter. Some 54 per cent expect an increase in turnover in the third quarter, while 45 per cent expect an increase in export orders. Also, 31 and 37 percent of respondents expect an increase of their export and profitability, respectively, as against the quarter ended September 2009.
And, a majority of 32 per cent of the respondents do not expect an increase in interest rates till the end of this fiscal. Respondents also feel that input prices will go down in the coming quarters, even as 43 per cent reported an increase in input prices in the second quarter.
The survey states improvement in performance can be attributed to the government stimulus announced during December 2008 and January 2009.
The first stimulus package included measures such as the Reduction in Cenvat by 4 per cent, an interest rate cut by public sector banks of 0.5 per cent for small enterprises and one per cent for micro enterprises, export support by interest subvention of 2 per cent, reduction in lock-in period under the Credit Guarantee scheme from 24 to 18 months and additional plan expenditure of Rs 20,000 crore.
