The Hindu : Confidence index down: FICCI

Online edition of India's National Newspaper
Wednesday, Apr 30, 2003

Business

Business

Confidence index down: FICCI

By Our Special Correspondent

NEW DELHI APRIL 29. A survey by the Federation of Indian Chambers of Commerce and Industry has found that its business confidence index had gone down to 63.3 because of weak sentiment on account of international and domestic developments.

In particular, the repercussions of the Iraq war, the outbreak of SARS, the lagged drought effect, forecast of below normal monsoon, dithering over and non-clarity about value added tax (VAT), the truckers strike and cost factors were identified as the main dampeners.

The survey, however, found some signs of pick up in investment, mild improvements in capacity utilisation and sluggish demand conditions as optimistic factors.

The heavy industry segment was the most upbeat with current performance, followed by services and light industries. With respect to expectations, the services sector was way ahead of heavy and light industry.

According to the survey, covering some 584 companies with varied turnovers above Rs. 1 crore, about 50 per cent of the respondents viewed the current overall economic conditions as `moderately or substantially better' that what prevailed in the last six months.

The corresponding figure in the last business confidence survey was 71 per cent.

Similarly, 56 per cent expected the economy to perform moderately better in the next six months as compared to 68 per cent in the last survey.

Apart from the drought factor, which was initially downplayed in India, industry is reported to be concerned about the external risk posed by development in Iraq.

While the war there may be over, the repercussions are expected to be felt the world over in the next few months in terms of oil prices, inflation, industrial growth and exports.

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