Hardening of oil prices in response to US-Iraq stand-off and the general slowdown in the pace of second generation reforms has painted a picture of moderate optimism among the Indian entrepreneurs. According to a business confidence survey done by FICCI, 30 per cent entrepreneurs said that the hardening of oil prices will have high impact on the economy while another 59 per cent feel the impact will be medium. Also, according to 90 per cent of respondents, slowdown in the pace of reforms will have a high to medium impact on the economy. But, still times are not all that bad as 52 per cent of the respondents feeling that the current overall economic conditions are substantially to moderately better compared to the last six months. About coming months, 63 per cent expect that overall economic conditions to be substantially to moderately better in the coming six months. The survey said that weak demand is clouding the prospects of India Inc with 62 per cent of the respondents feelings that it is having an adverse impact on their business performance. It further said that slowdown in demand is further reflected in capacity utilisation pattern of the firms. Almost 50 per cent of the respondents said that they have idle capacity of more than 25 per cent. The excess capacity lying unutilised with the firms is deterring planning of fresh investments. In the coming six months, only about 28 per cent of the respondents are planning higher investments, it added. However, all these developments have not cast a pall of gloom over the Indian industry. Nearly 68 per cent respondents are expecting higher to much higher sales in the coming six months while 53 per cent are expecting higher to much higher profits. A separate financial analysis of the second quarter results of 2002-03 compared to the same period last year, clearly reflects that sales are up by 10.61 per cent and net profits have registered an increase of 16.85 per cent. Spanning a wide range of activities, with a turnover ranging from Rs 1 crore to Rs 2,500 core, the respondents came from companies including Tata Telecom, Ernst & Young, Dabur, Citibank, Wipro, Apollo Tyres, JK Industries, Asian Paints, etc.
