08-18-2006, 01:45 AM
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>India Inc gives poor rating to UPA Govt </b>
Pioneer News Service | New Delhi
The frown on the brows of Prime Minister Manmohan Singh could get deeper.
After the concerns over aam admi sensitivities over price rise of essential commodities, corporate India has given poor rating to the UPA Government.
Federation of Indian Chambers of Commerce and Industry (FICCI) in its quarterly survey released on Thursday said corporate India's business confidence is waning.
Inflation due to rising fuel price and hike in interest rates "have dented the overall business confidence," the survey said. The Business Confidence Survey rings warning bells as high oil prices and hardening of domestic interest rates squeeze profit margins and investments plans come under pressure, the survey said. Corporate India is clearly concerned about its near-term performance. Corporate India's business confidence, which rode high in the four successive quarters of the fiscal 2005-06, is waning.
All the three confidence indices computed by FICCI in the current survey have dropped in comparison to the last round.
While the Current Conditions Index and the Overall Business Confidence Index have been relegated to the 'moderately optimistic' zone, the Expectations Index continues to remain in the 'significantly optimistic' zone.
The results of the present round of FICCI Business Confidence Survey, conducted during the month of July-August 2006, show that there has been a strong moderation in the views of the Indian industry with regard to economy, industry and firm level performance. The small and medium enterprises are worst hit as the cost of borrowing goes up, the survey reveals.
<b>For the third quarter in a row, 70 per cent of the companies have reported rising cost of raw materials as a constraining factor. Rising fuel prices have further limited the operational manoeuvrability of the companies</b>.
Further, <b>with the majority 57 per cent reporting no likely change in selling prices in the next six months, profit margins have come under increasing pressure. Fewer companies have reported higher selling prices this quarter and more have reported lower profits. Nearly 20 per cent of the firms reported lower profitability in the past six months. </b>
<b>Added to this, cost of credit has increased with the hike in interest rates leading to 36 per cent of the companies reporting high cost of credit as a constraining factor to their business performance.</b>
Recent rounds of FICCI's Business Confidence Surveys identified rising input prices as a key constraint for Corporate India. Further, rising fuel prices due to political uncertainties in West Asia accentuated supply side pressures.
Inflationary pressures were persistent globally and economies such as the EU and US reacted by tightening interest rates - a measure that would impact global growth in the current year. Above all, the July-end increase in interest rates in India, have combined to create anxiety about the future.
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Pioneer News Service | New Delhi
The frown on the brows of Prime Minister Manmohan Singh could get deeper.
After the concerns over aam admi sensitivities over price rise of essential commodities, corporate India has given poor rating to the UPA Government.
Federation of Indian Chambers of Commerce and Industry (FICCI) in its quarterly survey released on Thursday said corporate India's business confidence is waning.
Inflation due to rising fuel price and hike in interest rates "have dented the overall business confidence," the survey said. The Business Confidence Survey rings warning bells as high oil prices and hardening of domestic interest rates squeeze profit margins and investments plans come under pressure, the survey said. Corporate India is clearly concerned about its near-term performance. Corporate India's business confidence, which rode high in the four successive quarters of the fiscal 2005-06, is waning.
All the three confidence indices computed by FICCI in the current survey have dropped in comparison to the last round.
While the Current Conditions Index and the Overall Business Confidence Index have been relegated to the 'moderately optimistic' zone, the Expectations Index continues to remain in the 'significantly optimistic' zone.
The results of the present round of FICCI Business Confidence Survey, conducted during the month of July-August 2006, show that there has been a strong moderation in the views of the Indian industry with regard to economy, industry and firm level performance. The small and medium enterprises are worst hit as the cost of borrowing goes up, the survey reveals.
<b>For the third quarter in a row, 70 per cent of the companies have reported rising cost of raw materials as a constraining factor. Rising fuel prices have further limited the operational manoeuvrability of the companies</b>.
Further, <b>with the majority 57 per cent reporting no likely change in selling prices in the next six months, profit margins have come under increasing pressure. Fewer companies have reported higher selling prices this quarter and more have reported lower profits. Nearly 20 per cent of the firms reported lower profitability in the past six months. </b>
<b>Added to this, cost of credit has increased with the hike in interest rates leading to 36 per cent of the companies reporting high cost of credit as a constraining factor to their business performance.</b>
Recent rounds of FICCI's Business Confidence Surveys identified rising input prices as a key constraint for Corporate India. Further, rising fuel prices due to political uncertainties in West Asia accentuated supply side pressures.
Inflationary pressures were persistent globally and economies such as the EU and US reacted by tightening interest rates - a measure that would impact global growth in the current year. Above all, the July-end increase in interest rates in India, have combined to create anxiety about the future.
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