FICCI’s Business Confidence Survey
FICCI has published its quarterly “Business Confidence Survey”. According to it, Business confidence of Indian companies has come down to its lowest in three quarters in May. In last survey, confidence was at decadal high.
Key findings of Survey
- Business Confidence Index (BCI) declined due to decline in optimism levels of participating companies with respect to current conditions.
- BCI stands at 51.5 in latest survey, after hitting 74.2 in previous survey round.
- However, index is still higher than 2020 (42.9) when nationwide lockdown was imposed.
- According to the survey, while economy was witnessing recovery after pandemic-induced lockdown in 2020, second wave has caused disruptions once again. It is significantly exacerbated impact on health front and undermined initial gains made on economic front.
- It reported an “improved capacity utilization rate” despite weak demand conditions because of localized curbs instead of complete lockdown. It ensured industry remaining functional throughout.
What FICCI suggests?
It suggests, measures to support demand is crucial for economy to recover from covid shock. Further, increased pace of vaccination will help in achieving faster normalization.
What are the concerns?
As per survey, rising raw material costs is a major problem for fourth consecutive survey. Around 65% the participants stated higher raw material costs is a constraint.
Employment and exports
Employment and exports have also deteriorated in this survey. Just 19% of participants were optimistic about better hiring prospects while 27% participants indicated higher outbound shipments. 80% of the companies were facing issues in carrying out their business.
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Month: Current Affairs - June, 2021