Ficci says economy looking up

NEW DELHI: The economy is on a revival path despite drought, according to a FICCI business confidence survey. Over 71 per cent of respondents from 403 companies, covering both the old and new economy, were optimistic and opined that overall economic conditions would improve in the next six months.
FICCI secretary general Amit Mitra said drought was not factored specifically into the survey but there was a new cheer emerging among Indian companies.‘‘We didn’t have a clear picture of drought when we conducted the survey in the last week of July. Over 70 per cent of the companies contacted projected better performance in the next six months,’’ said Mitra.
A drought survey which would impact specific sectors would be released in the next fortnight, according to him.
‘‘Despite this survey being undertaken against the backdrop of weak monsoon, industry is buoyant about overall economic conditions,’’ the study said.
It said mining, manufacturing and electricity sectors have experienced a higher growth rate this quarter compared to the same period last year. The study was concurrent with the RBI’s growth prediction of 6-6.5 per cent GDP growth for the year 2002-2003.
The survey covered a wide range of businesses with turnover ranging from Rs one crore to Rs 15,000 crore, covering companies in the engineering, pharma, steel, food, beverages, textiles, technology, automobiles, paper, construction, cement, FMCG and packaging sectors.
Over 91 per cent of the respondents said the interest rates would drop further in the next six months. Moreover, 63 per cent of respondents expect BSE Sensex to advance in the medium term than in the short term.
About a quarter of the respondents said the BSE Sensex value would hover between 3,200 and 3,400 in the next three months, while another 36 per cent felt the index could go up to 3,600.
Over 75 per cent of the companies projected sales to be higher, 59 per cent expect profit and exports to go up. At the same time, only 35 per cent are planning to substantially invest in the next six months.
But the overall employment scenario is bad. Only 15 per cent of the respondents are looking for new recruitment while a majority of 67 per cent would like to just maintain current level of employment.
After analysing first quarter results (April-June 2002) of 502 companies, FICCI said corporates have increased net profit by 19.24 per cent and sales 13.14 per cent.
Meanwhile, a CII-Ascon survey has indicated a revival in the manufacturing sector for the April-June 2002 over the same period last year.