Indian companies are not too optimistic about economic recovery in the country going forward due to negative investment climate, weakness in exports and pressure on commodity prices, according to Assocham’s Bizcon Survey.
Further, the study suggests that jobs market is unlikely to see any major improvement in the coming months owing to overall weak business sentiments.
Against 82.6 per cent of the respondents in the Bizcon Survey stating in March 2015 that the prospects should improve in the coming months, the ratio of such firms has come down to 54.8 per cent in the latest June edition of the study, which maps the state of economy at different levels.
As for the present scenario, 61.5 per cent of the respondents felt that the situation is more or less same vis-a-vis six months ago.
“There are several reasons for the corporates being less optimistic in June than in March, the principal being negative signals from the global demand resulting in continuous fall in exports and a big pressure on commodity prices, which in turn, have affected the investment scenario,” Assocham Secretary General D S Rawat said.
On the employment front, not much seems to have changed during April to June 2015, as 51.6 per cent respondents felt so. In the short horizon also, the survey indicates that there will be no change in the employment scenario in the industry.
“Though the government has taken a number of steps to ease the business environment, the investment outlook does not look very promising.”
“The most important trigger for reviving the industrial growth would be infrastructure development, followed by effective policy reform, speed in project clearances, reducing cost of borrowings and the stable foreign exchange,” the Survey suggested.
However, the external outlook looks worrying when it comes to goods exports which have declined for the seventh month in a row, it added.
“Some other important measures suggested by respondents to revive the industry are keeping inflation low, further containing trade deficit, better coordination with state governments, SMEs promotion, time-bound settlement of issues, continuous monitoring plan for implementation of projects and simplification of taxation and industrial policies,” Rawat said.