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Assocham: Country’s economy to improve within six months

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Economy of India
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New Delhi: According to Assocham Bizcon Survey, the state of country’s economy would improve in the coming six months but investments in the private sector will still be a concern because of under utilisation and pressure on profit margins.

Nearly 63 per cent of the poll respondents felt “the state of the economy would be better in the coming six months”.

However, it found that 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.

In terms of the domestic investment, 58.3 per cent respondents felt there has been no change in the investment plans at the level of individual firms.

The sentiment seems to remain muted, going forward with 62.5 per cent respondents of the view that January to March 2016 quarter would not see much change in the investment levels.

“Thus, there seems to be a continuing lack of appetite for new investment in the private sector,” the survey noted.

Assocham Secretary General D S Rawat shared the concerns brought out by the respondents in terms of pressure on profitability and lack of investment.

“Global deflationary situation creeping into India in several sectors is hitting investor sentiment. 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.

“The lead has to be taken by the government which has an onerous task before itself along financial sector regulators like RBI and SEBI to ensure investor confidence in the markets which can then feed the investment climate,” Rawat said.

The respondents seem to be highly optimistic with regards to their firm’s future performance as 70.8 per cent of them feel that they will be in a better position in the coming six months.

As many as 41.7 per cent of respondents felt that there is a decline in the sales volume during October to December 2015 while expecting better sales volume during January to March 2016 and 45.8 per cent expect that their sales volume will increase in future.

In terms of the future capacity utilisation, 66.7 per cent 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.

“This is slightly surprising considering the fact that the monetary authority has reduced the policy rates. The possible explanation to this could be that the benefit of the rate cuts is not being passed onto the industry appropriately,” Assocham said.(IANS)(image: internetblog.urg.uk)

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Big reforms Led to India becoming the fastest growing major Economy globally: Garg

It also has enormous implications for emerging markets and developing countries

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The RBI building in Mumbai.
The RBI building in Mumbai. Photo credit: AFP/Sajjad Hussain

The major reforms undertaken by the Indian government for raising economic growth and maintaining macroeconomic stability have made the country one of the fastest growing major economies in the world, said Subhash Chandra Garg, Secretary, Department of Economic Affairs (DEA).

Garg was addressing the Special Event hosted by US-India Strategic Partnership Forum on ‘Indian Economy: Prospect and Challenges’ in Washington D.C on Friday.

Indian economy needs more reforms.
Indian economy needs more reforms.

He said the launch of the Goods and Services Tax (GST) represented an “historic economic and political achievement, unprecedented in Indian tax and economic reforms, which has rekindled optimism on structural reforms.” He further emphasized that India carried-out such major reforms when the global economy was slow.

“With the cyclical recovery in global growth amid supportive monetary conditions and the transient impact of the major structural reforms over, India will continue to perform robustly,” Garg said.

During his meetings, Garg highlighted that the digital age technologies have profound implications for policies concerning every aspects of the economy. It also has enormous implications for emerging markets and developing countries.

Also Read: Biggest Bank Frauds Which Shook The Indian Economy

He expressed that the response to such a transformation will have to shift from ‘catch up’ growth to adoption/adaption of digital technologies for development and growth.

Garg also informed that India has started adopting policies and programmes for transforming systems of delivery of services using digital technologies and connecting every Indian with digital technologies and access through Aadhaar and other such means.

Indian economy should be on rise.
Indian economy should be on rise. Image: Mapsofindia

While citing the example of expanding mobile data access, he mentioned that India is now the largest consumer of mobile data in the world with 11 gigabytes mobile data consumption per month. He informed that India is investing in digital technologies, encouraging private sector to adapt these technologies and also addressing the taxation related issues by introducing equalisation levy.

Garg is currently on an official tour to Washington D.C. to attend the Spring Meetings of the International Monetary Fund and the World Bank and other associated meetings. He is accompanied by Urjit Patel, Governor, Reserve Bank of India and other senior officials. IANS