Investment climate to remain gloomy, says Ficci survey

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New Delhi | Updated: September 7, 2015 11:22:09 AM

The country’s investment climate will likely remain gloomy for some time, with only a fourth of companies that participated in a survey by Ficci planning fresh investments...

ficciEven hiring outlook looked far from satisfactory, as roughly 79% of the respondent-companies are unlikely to hire additional workers over the next three months. Although this proportion is slightly less than that of 80%, it’s still too high. (ficci.com)

The country’s investment climate will likely remain gloomy for some time, with only a fourth of companies that participated in a survey by Ficci planning fresh investments in manufacturing over the next six months.

“Delay in regulatory clearances, poor demand conditions and high cost of borrowing are some of the major constraints which are affecting expansion plans of the respondents,” the survey said.

Just 44% of those surveyed said they had witnessed higher production in the first quarter of this fiscal from a year before, compared with 52% in the preceding one, marking the worst performance since the first quarter of 2013-14 when only 35% of respondents had seen higher production year-on-year, according to Ficci.

No wonder, the growth in gross value added in manufacturing—as reflected in the recently-released GDP data—slowed to 7.2% in the June quarter, against 8.4% in both the March quarter and the first quarter of 2014-15.

Even hiring outlook looked far from satisfactory, as roughly 79% of the respondent-companies are unlikely to hire additional workers over the next three months. Although this proportion is slightly less than that of 80%, it’s still too high.

However, 44% of respondents have reported higher order books for the April–June period, slightly higher than 42% in the previous quarter. Even Inventory levels indicate some improvement, as around 29% of those surveyed said they were carrying more than their average inventory levels, compared with 33% in Q4 of the last fiscal.

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