The business fraternity expects a steady recovery in the Indian economy during the second half of the financial year 2020-21, shows a poll of CEOs done by CII.
A statement by the industry body said that India Inc is estimating a capacity utilisation of over 50 per cent during October-March in FY21.
“A steady recovery of the Indian economy is on the anvil as corporate India restarts business and economic activity with lockdowns being increasingly relaxed in many parts of the country. For the first time since the advent of the pandemic in the country in early 2020, India Inc is now estimating a capacity utilisation of more than 50 per cent in the second half of this financial year,” it said.
CEOs of top 115 companies who met at CII’s National Council recently, indicated revival of positive business sentiment and gradual rise in expected corporate performance.
The CEOs of top companies who took the poll included representatives across sectors from metals and mining to manufacturing, auto, pharmaceuticals, health, energy, infrastructure, construction and leading services sectors including ITeS, health, hospitality, tourism and e-commerce.
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The apex body also had a large representation of the medium and small sector apart from start-ups, it said.
The statement said that the unlocking of almost all economic activities, along with the reform and revival measures announced by the government and the Reserve Bank of India (RBI) have contributed to the gradual improvement in business sentiments in the second half of the current financial year.
“While in most cases, the performance – revenue or capacity utilisation – is estimated to be lower than the comparative figures in 2019-20, a large percentage of the CEOs polled have shown confidence in the days ahead indicating that the worst may be behind,” it said.
On consumer demand, while 32 per cent of the CEOs are hoping for better prospects, another 27 per cent of them expect no change when compared to the second half of the last financial year.
However, only 31 per cent of the CEOs expected their revenue growth to be in the positive territory in the second half of the current financial year compared to last year. Regarding exports, 40 per cent of the CEOs expect better prospects on exports and 24 per cent of them expect no change in prospects during the second half of the current fiscal when compared to the same period last year.
Apart from the agri-sector that has been in the positive territory there are now clear indications of a smart recovery in some sectors like automobiles, FMCG, consumer durables and construction equipment, the CII statement said.
According to CII, both the Centre and State governments would need to focus on livelihoods in addition to lives and hence efforts need to be made to stall the practice of sudden and ad hoc lockdowns announced by states as well as districts.
These not only further disrupt the revival of economic activities but also do not yield the desired results on lives either, it said.