New Delhi: With India’s business confidence sinking to a seven-year low and the situation expected to worsen in the next six months, most firms covered in an industry survey said they are capping fresh hiring.
Close to 88% of the 412 firms surveyed by the Federation of Indian Chambers of Commerce and Industry, or Ficci, between November and December this fiscal said the situation had deteriorated in the past six months. At least 52% felt overall economic conditions would “weaken further in the coming six months”.
The overall Business Confidence Index dipped to a seven-year low of 37.8 in the second quarter of the fiscal, from about 70 in 2002-03, Ficci Business Confidence Survey said.
Bull run over? The BSE building in Mumbai. Ficci’s Business Confidence Index fell to a seven-year low of 37.8 in Q2 FY09. Ashesh Shah / Mint
The axe has already fallen on casual workers. “About 57% of the companies have reported that to bring down costs, they are reducing the number of casual workers,” the survey found.
With exporters facing cancellation of orders and many companies putting the brakes on fresh hiring, “there is a sense of gloom in corporate boardrooms”, the chamber said.
“As many as 68% of those surveyed have decided or are looking at the policy not to fill up vacancies for the time being,” the survey said.
About 70% of the firms have reported that banks have not yet eased credit disbursal norms despite a slew of measures announced by the Reserve Bank of India.
It said prospects for key business parameters such as sales, profits, investments, selling price, exports and employment look “very bleak”.