The CII Business Confidence Index (BCI) for MSMEs, for the current quarter declined over the last quarter by a significant 3.1 percentage points.
The CII Business Confidence Index (BCI) for MSMEs, for the current quarter declined over the last quarter by a significant 3.1 percentage points.
The survey showed that inflation and the interest rates have proved to be difficult to contend with for all concerned and they could threaten plans to achieve the double digit growth.
Credit cost for working capital, capacity expansion and credit availability have registered a decline, as per the survey report.
The CII survey found the service sector to have convincingly outshined the Industrial sector with regard to, new orders / contracts, exports, capacity expansion and Net profit margin. Industrial sector has done well in gross sales and selling prices.
MSMEs in industrial sector also seem to be relatively less favorably placed in terms of credit availability and credit cost of working capital as compared to their counterparts in services sector, possibly highlighting the need for a policy intervention.
Commenting on the findings, CII's Deputy Director General, Gurpal Singh viewed that the first quarter for 2011-12 is going to be a crucial one for the Indian MSMEs as most of the policy actions taken by the government begin to take shape.
He added that India’s signing Comprehensive Economic Partnership Agreement (CEPA) with Japan and Comprehensive Economic Cooperation Agreement (CECA) with Malaysia should serve as the silver lining for cloud and have a positive impact on MSME sector's business sentiments.
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