Indian economy is expected to get better in next six months, however lack of investment appetite in the private sector in the backdrop of lower capacity utilisation, excess supply and continuous pressure on profitability are the key areas of concern for the next few quarters, according to the Assocham-Bizcon survey. Assocham asserted that the India Inc. hopes to see better sales volume and improved capacity utilization in the next two quarters but does not expect any uptick in investment and corporate earnings even as the overall macro situation would change for better.
As per the Assocham-Bizcon survey, nearly 63 percent of the survey respondents felt the state of economy would be better in the coming six months. In terms of the domestic investment, 58.3 percent respondents felt there has been no change in the investment plans at the level of individual companies. Further, 62.5 percent respondents in the survey have said that the January-March quarter of 2016 would not see much change in investment levels. As many as 41.7 percent of respondents felt there was a decline in sales volume during October-December 2015 and expected better volumes during January to March 2016, while 45.8 percent expect their sales volumes to increase in future. In terms of future of capacity utilisation, 66.7 percent said the industry will be engaged at higher levels. Besides, 54.2 per cent said there was no change in the cost of credit during October to December 2015.
Sharing concerns brought out by the respondents in terms of pressure on profitability and lack of investment, Assocham secretary general D.S. Rawat has said that global deflationary situation creeping into India in several sectors is hitting investor sentiment. He added that the consumer confidence can return only if there are more job opportunities through higher investment into productive areas of the economy like construction, infrastructure and manufacturing.
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