Indian companies gloomy about the future, shows RBI survey

India Inc. isn’t very positive about the future growth of their business as both the engines of the Indian economy have slowed down. Private investment and consumption demand are both wobbling and that’s emerged as a major cause of concern among businesses, according to the industrial survey conducted by the Reserve Bank of India. The survey sought responses from 1231 companies. 
 
The business sentiment indices released by the banking regulator show that the Indian manufacturing companies are comfortable in the current environment but they remain worried about the prospects of the coming quarters. The expectations index has seen a drop to 112.8 for the September quarter from 113.5 for the June quarter. 
 
At the same time, businesses are very pessimistic about the cost of funding and less optimistic than before on availability of funding. This is essentially the impact of ongoing liquidity crunch in the economy made worse by the NBFC crisis. 
 
It’s not just funding that’s keeping corporate executives up at night. Companies are worried about sales and moving inventory as there are concerns about a pile-up due to a glut in consumption demand. First signs of this are already visible from the auto industry. 
 
Meanwhile, there’s a clear drop in the optimism over employment, exports and use of capacity. The only silver lining seen in the index is that the input prices have dropped sharply, which could help companies maintain their profit margins. 


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