New Delhi, Jan 31 () India Inc is facing huge risks from delays in necessary structural reforms in the factor markets and lack of adequate credit availability to MSMEs, Ficci said on Friday, citing findings from its Business Confidence Survey that saw improvement in the optimism level of industry members after seven quarters.
The Overall Business Confidence Index improved to 59 in the current round as against an index value of 55 reported in the last survey.
However, a majority of respondents continued to cite weak demand situation as a worrying factor for their business. In the current survey, 76 per cent participants reported weak demand conditions as a bothering factor as compared to 73 per cent stating the same in the previous round.
In addition, respondents highlighted the need for undertaking taxation reforms to remove anomalies in the tax regime. With regard to indirect taxes, companies felt that GST rates should be revisited and be further rationalised.
"A need for urgent measures to enhance competitiveness of the Indian industry was also strongly felt. Creation of land banks, comprehensive labour market reforms that are in sync with the business needs of today, and easy availability of credit were some of the recommendations made by the participants," said Ficci on the survey.
The survey results allude to a moderate outlook for investments. Around 37 per cent participants said that they foresee much higher investments over coming six months as against 38 per cent stating likewise in the last survey.
"India Inc is facing huge risks from delays in necessary structural reforms in the factor markets and lack of adequate credit availability to MSMEs (micro, small and medium enterprises). Stagnancy in exports, delay in disbursement of subsides/incentives for exports, high transaction costs involved in trade and excessive dumping of goods, were some of the concerns cited on the external front," Ficci stated.
To overcome these risks, a majority of the participating companies are planning to reduce their costs of operations to ensure that their business grows in the year 2020. Around 62 per cent participating companies said that they will try to access new markets within the country as it will help them expand their business outreach, it said. RSN HRS
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