Speedy recovery uncertain: Assocham

New Delhi: Industry sentiments seem to have taken a hit recently. The number of optimistic firms is less in June than what it was in March, according to Assocham Bizcon survey. 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, as per the survey.

“Instead, less number of corporates feel the situation at the macro level would be better going forward than the level of optimism shown in three months,” said Assocham. “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 optimist firms has come down to 54.8 per cent in the latest June edition of the survey, which maps the state of economy at different levels,” it said.

Assocham said that the principle reason for corporate being less optimistic is continuous fall in exports and a big pressure on commodity prices, which in turn, have affected the investment scenario.
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, speedy project clearances, reducing cost of borrowings and the stable foreign exchange,” the survey said.
However, the external outlook looks worrying when it comes to goods exports which have declined for the seventh month in a row, it added.

“Other 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,” said Assocham.