CII survey forecasts business situation improving after July

Coimbatore, Aug 21: A survey conducted by the Confederation of Indian Industry has forecast an improvement in the business situation in the country during July-December 2001.

Twenty five per cent of the respondents, covered all over the country, were optimistic about the general business conditions while 32 per cent felt that the business condition were poor in comparison with the previous year.

Twenty per cent of the surveyed respondents expected that the production growth would be negative, while 32 per cent expected ten per cent growth for the companies, the survey, a press released said.

The survey also revealed that only 14 per cent of the industry had achieved capacity utilisation of below 14 per cent, while 34 per cent achieved 61-80 per cent utilisation during the last six months.

The industries expected capacity utilisation of about 40-80 per cent during the coming months. However, about 59 per cent have predicted a decrease in employment opportunities as against the 41 per cent, who foresee an increase in employment.

With regard to sales, 52 per cent of the respondents expected increase, while 20 per cent felt that there would be no change, the survey said.

Though 51 per cent of the respondents registered a declining trend in profit margins in the last six months, 29 per cent expected margins to raise.

The survey said eight per cent of the respondents feared that the inflation rate would be above ten per cent in the coming months, while 67 per cent expected it to be 5-10 per cent.

The respondents considered the delayed payments as the single most important obstacle to the operation and growth of the enterprises, the report said, adding higher interest rates, collateral requirements of the lending banks, inordinate delay in clearing loans were other hindrances.

Interestingly 59 per cent of the respondents did not foresee traditional banking sources being replaced by alternate sources of finance.

Just 59 of the 352 respondents have been using venture capital, factoring services, credit guarantee fund and capital markets to raise funds.

Most of the respondents did not consider credit guarantee fund launched by Sidbi, as a substitute for collateral security while 75 per cent of them felt the Rs 25 lakh limit under the scheme was insufficient.

The survey also predicted an increase in volume and value of export business orders, saying that over 45 per cent of respondents did not experience any change during the past six months. (PTI)