SMEs bear brunt of factory slowdown

Apr 13 2014, 12:00 IST
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Reduced output: RBIís latest capacity utilisation survey points to weak conditions in manufacturing sector. Reuters Reduced output: RBIís latest capacity utilisation survey points to weak conditions in manufacturing sector. Reuters
SummaryReduced output: RBIís latest capacity utilisation survey points to weak conditions in manufacturing sector.

ratio rose gradually between Q3FY13 and Q1FY14. In line with the trend in other parameters, finished goods inventory to sales ratio also dipped in Q2FY14 confirming the improvement in the demand condition.

The RBI has been conducting the OBICUS survey of Indian manufacturing companies on a quarterly basis since 2008. Information relating to order books, level of capacity utilisation and finished goodsí inventory level, which are reflective of incipient demand conditions, are generally not disclosed by most of the companies.

The survey attempts to bridge this information gap. In the absence of a comprehensive Business Register in Indian context, the survey schedule is canvassed among a fixed panel of 2,500 manufacturing sector companies.

However, responding to the survey is voluntary. The information collected in the survey includes quantitative data on new orders received during the reference quarter, backlog orders at the beginning of the quarter, pending orders at the end of the quarter, total inventories with breakup of work-in- progress and finished goods inventories at the end of the quarter.

It also includes item-wise production in terms of quantity and value during the quarter vis-ŗ-vis the installed capacity from the targeted group. The level of capacity utilisation is estimated from the above data.

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