Business confidence of India Inc. is the worst in more than four years and majority of the firms don't plan fresh hiring and investments, an industry survey revealed.
According to the Business Confidence Survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI), expectations with regard to major operational parameters, including sales, profits, investments, exports and employment, have taken a beating.
The outlook with regard to sales, profits, exports remained subdued, with a majority of respondents anticipating no change from the current levels in the coming six months.
"A majority 67 percent of the participating companies indicated that they don't intend any fresh hiring in near term and their workforce is expected to remain at the current levels," FICCI said in the survey report.
The survey, conducted in July and August, showed significant decline in performance of companies and most of them are not optimistic about the near term performance either.
"The slide in the confidence level of corporate India continued for the fourth successive quarter and this value is the lowest seen in almost seventeen quarters and reminds one of the difficult situation that was faced during 2008-09," FICCI said.
The investment sentiment has been knocked down considerably as a sense of apprehension continues to grip members of India Inc.
The proportion of respondents citing an increase in investment levels over the next two quarters declined to 21 percent in the latest survey, from 37 percent reported in the previous survey.
The participating companies reported that both cost and availability of credit have again emerged as issues constraining growth. A substantial increase was noted in the percentage of respondents stating the same between the present and the last survey.
High cost of credit was reported to be a concern by 72 percent of the participating companies. The corresponding number in the previous survey was 57 percent.
On other factors affecting the performance of the companies, a majority of respondents indicated weak demand and cost of manpower to be areas of concern.
Respondents also said that sharp fall in the rupee value has affected their input costs, which in turn has lowered their profitability. Both capital and operational costs have been impacted. The participating companies said that they are in a fix as they cannot pass the increase in cost to the consumers.