Worst seems to be over for India Inc: Ficci survey

India Inc has regained the much-needed business confidence with majority of 300 companies stating, in an industry survey, that they see better economic outlook in the next six months.

As many as 57 per cent of the companies measured on the quarterly business confidence index (BCI) of Ficci, indicated that they expect the overall economic condition to be 'moderately to substantially' better in the next six months.

The Ficci survey of the fourth quarter of fiscal 2008-09 is in sharp contrast with findings of the BCI of the previous quarter when only 9 per cent firms had seen a bright outlook.

"The economy has bottomed out as was also indicated in the last survey and is clearly in the recovery mode,"  Ficci said.

The gross domestic production (GDP) recorded in the last fiscal was 6.7 per cent, which was better-than-expected.

Improvement in business confidence comes amidst the new UPA government working on a 100-day programme for putting the economy back on the fast track.

The BCI for the fourth quarter of fiscal 2008-09 was up to 64.1 from 44 in the last quarter.

About 47 per cent of the respondents said that their current firm performance has improved vis-à-vis last six months, representing a jump of 26 per cent from 21 per cent in the last survey.

The percentage of companies which saw a deterioration in their performance over the last six months has declined significantly to 18 per cent from 55 per cent in the last survey, the Ficci-BCI survey said.

The chamber has surveyed companies in various sectors, including textiles, cement, steel, leather, chemicals and fertilisers, FMCG, banking and autos.

However, the companies feel that there are hindrances in their growth, including weak demand, high cost of credit, although the credit problem has come down in the current survey.

The steps taken by the RBI and the government over the past two quarters have been instrumental in giving a boost to demand but there is still scope for further announcements to bring the economy back in full swing, the survey said.

Further, the respondents indicated that they would want to see a decline in interest rate by about 3-4 per cent.

"There is an immediate need to bring down the interest rate in line with the decline in the repo rate," the survey said.