‘Private investment to go on with slow pace’
Even as the Indian economy is expected to see an increase in sales volume and capacity utilization in the next six months, private investment and corporate earnings are likely to remain sluggish, a study has said.
“Lack of investment appetite in the private sector in the backdrop of lower capacity utilization, excess supply and continuous pressure on profitability are the areas of concern, for the next few quarters,” said the Associated Chamber of Commerce and Industry ASSOCHAM-Bizcon survey.
The survey which analysed the overall economic situation as well as individual firms found that a majority (62.5%) of the respondents hope for a “better state of economy” in the coming six months, although not much has changed in the past six months.
While 58.3% of respondents agree that there has been no change in the domestic investment plans by firms at individual level, 62.5% feel that January-March 2016 quarter will not see much change in the investment level.
“Thus there seems to be a continuing lack of appetite for new investment in the private sector,” the survey noted.
On the firms’ individual performance, the respondents seem to be highly optimistic as 70.8% say that they will be in a better position in the coming six months. In terms of the capacity utilization expectations, 66.7% say that the industry will be engaged at higher levels.
According to ASSOCHAM General Secretary D S Rawat, respondents are concerned over global deflationary situation creeping into India as a major blow to 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,” he added.
He suggested the government regulators like Reserve Bank of India and SEBI to infuse confidence among investors to improve the investment climate.
January 25, 2016 | 03:10pm IST
to success.