India's business confidence at four-year low - survey
NEW DELHI, Sept 16 (Reuters) - India Inc.'s self confidence has slipped from a year ago to a four-year low, according to a survey released on Monday, as Asia's third largest economy struggles to raise slow growth and businesses try to cope with a weak rupee.
The Indian currency is down about 12 percent this year and had a particularly bad fall in July and August, when the survey by Federation of Indian Chambers of Commerce and Industry, or FICCI, was conducted.
"Business sentiment has been hit adversely and investment prospects don't seem very promising. A sense of apprehension continues to grip members of India Inc.," FICCI said in the study.
In the latest survey, the confidence index declined to 49 from the March-April reading, which was 57.4. The latest number is the lowest in 17 quarters and FICCI said the level of confidence was reminiscent of the 2008/9 global financial crisis.
Rising labour costs and weak demand remained key factors constraining companies' growth. The low availability and high cost of credit emerged as serious concerns affecting performance, respondents reported.
India's central bank has taken a series of measures to stabilise the rupee, including draining liquidity from the banking system, which has restrained credit availability.
India's economy grew at an annual 4.4 percent in the April-June quarter, its slowest rate since the first three months of 2009.
A majority of the companies that participated in the survey said they don't intend to hire any time soon. Respondents expected a "moderately to substantially worse" performance in the economy and industry in the coming months.
"The near term outlook of respondents with regard to sales, profits and investments remained subdued. The outlook with regard to exports and employment was muted as well," FICCI wrote in the report.
The rupee's slide to record lows also adversely affected the input costs of companies, lowering their profitability, the trade group noted. Companies now say they are trapped as they cannot pass on increased costs to customers, according to the survey.
Many respondents said that improving basic infrastructure and expediting stalled projects will help revive flagging industrial growth. Simplifying procedures and policies in starting and running businesses would also boost confidence, they noted, according to the survey, which drew responses from about 200 companies.
(Editing by Frank Jack Daniel and Richard Borsuk)