The opening up of India’s economy post lockdown and implementation of the economic package unveiled by the government have started showing results on the ground with initial signs of improvement in the performance of businesses now visible, says a survey.
The Ficci-Dhruva Advisors industry survey was conducted in June 2020 and saw participation of over 100 top corporate executives (CxOs) from across sectors.”While the green shoots of recovery are being seen, it is important to emphasise that sustaining this improvement in the operational parameters of businesses will require continuous support from the government.
“The support is particularly needed in the realm of strengthening market demand in the absence of which this initial recovery may fizzle out,” Ficci emphasised.
The results of the survey show that presently close to 30 per cent of the firms are operating at 70 per cent plus capacity utilisation, while nearly 45 per cent expect capacity utilisation to be above 70 per cent in the near term.
In terms of the challenges that firms foresee they will continue to face even during the unlocking phase, managing costs, weak demand and financial liquidity remain the top three items with 60 per cent, 59 per cent and 57 per cent reporting the same.
“Some of the survey respondents have also alluded to the second wave of Covid-19 as a challenge they foresee that could affect businesses going ahead. A sudden stop on the imports from China, given the most recent developments, also figured in the feedback received as part of the survey on challenges that could impact businesses,” said Ficci on the survey.
On the jobs front, nearly 32 per cent of the firms have reported that they see a job loss of over 10 per cent from their company’s perspective. In April edition of this survey, this figure was close to 40 per cent.
Unlocking of the economy is starting to have a positive impact on exports, cash flows, order books and supply chains, it observed.
It revealed that 22 per cent of the respondents have said that exports have improved in recent times. 25 per cent have reported a positive impact of unlocking of the economy on order books and 21 per cent have confirmed improvement in cash flows.
Nearly 30 per cent of the firms are seeing their supply chains getting back on track.
Notably, in the April edition of the survey only 5 per cent of the companies were expecting an increase in exports, 7 per cent had reported increase in order books and 10 per cent expected an improvement in cash flows.
However, the survey results further show that on strategic issues like M&A and FDI, majority of the firms still plan to wait for 6-12 months before decision making.
