With 51% of the respondents sounding out plans for new investments and 9% expecting a decline
on this front, the index stands at 42, a 2 points increase from the last quarter's value of 40. With nearly 70% of the firms operating at above 75% of their present capacity, capacity expansion in the months ahead is very much on the cards.
On the employment front, there has been an increase in the proportion of firms intending to add to their present employee headcount from 25% in the previous round to 30% this time. This is accompanied by a decline in the proportion of firms reporting a reduction in employee strength in the coming six months. As a result there has been a ten-percentage points improvement in the employment index from the previous quarter value of 13 to 23 this time.
These trends are consistent with the findings of FICCI's Manufacturing Competitiveness Survey released last month. Developments such as introduction of the Fringe Benefit Tax, the differential treatment on the applicability of VAT across States, appear to have psychologically impacted the sentiments of the respondents. Coupled with lower kharif output in September 2004 with a lagged impact on demand, and hardening of oil prices, the overall Business Confidence Index has dipped to 71.6 in the last quarter (close to the level seen in Q2 of 2004-05) from 75.6 in October-December 2004-05.
The key findings of the Survey are:
• A majority 67% of the respondents feese to the level seen in Q2 of 2004-05) from 75.6 in October-December 2004-05.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
