Latest round of FICCI’s Business Confidence Survey reported signs of moderation in the optimism level of corporate India. The index value slipped to 66.3 according to the results of FICCI’s latest survey round, which is a six quarter low. The index value stood at 73.2 in the previous round. The build-up in confidence noted since Government assumed office last year has been encouraging, however the same momentum needs to be sustained going ahead.

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Business Confidence Survey
August 2015
Overall Business Confidence Index slips seven notches to 66.3 in the latest survey
 Latest round of FICCI’s Business Confidence Survey reported signs of moderation in the optimism level of
corporate India. The index value slipped to 66.3 according to the results of FICCI’s latest survey, which is a six
quarter low. The build-up in confidence noted since Government assumed office last year has been
encouraging, however the same momentum needs to be sustained going ahead.
 According to results of the latest survey, the participating companies did not report much improvement in
the current conditions vis-a-vis last six months at the economy and firm level. At the economy level the
proportion of respondents citing ‘moderately to substantially better’ performance vis-a-vis last six months
declined to 66% in the present round from 73% stating likewise in the previous round. This perception of
respondents finds ground in the actual economic data as well; a firm rebound in the economy still remains
elusive. Nonetheless, an increase was noted in proportion of respondents indicating improved conditions
compared to last six months at the industry level.
 Further, the near term expectations of respondents also noted some restraint. In the current round even
though a majority of respondents said that they anticipate a ‘moderately to substantially better’ performance
over the next two quarters, the proportion of companies that hold this view has moderated when compared
to the previous survey round. In the latest survey about 78% of the respondents said that they foresee an
improved performance at the economy level in the coming six months; the corresponding figure in last survey
was 94%. At the industry level, 71% of the respondents cited a better performance in the coming six months
in the present round, vis-à-vis 87% stating the same last time.
 The corporate results for the first quarter of this fiscal year indicated weak performance owing to a host of
domestic and global factors. The capacity utilization rate of companies remains low with about 50% of the
participants reporting that they are operating at below 75% capacity. In addition, results with regard to
operational parameters indicate mixed signs.
 Even though the proportion of respondents anticipating an increase in investments, profits and
employment noted an increase in the latest survey; this was offset by an increase noted in the proportion of
participants foreseeing worsening for these parameters. Further, the outlook of the respondents with regard
to sales and exports also took a beating.
 In the current survey, 43% of the respondents said that they expect higher investments over the next six
months, vis-à-vis 38% stating likewise in the previous round. However, the proportion of respondents
anticipating lower investments went up to 9% in the present survey from 3% last time.
 Likewise with regard to profits, while the proportion of respondents foreseeing higher profits increased to
37% in the current survey from 32% last time; those anticipating a decline increased to 17% from 3% in the
last survey.
 As for the sales prospects, 66% of the respondents in the current round expected higher sales over the near
term, vis-à-vis 73% stating likewise in the last round.
 With the global recovery remaining fragile, export prospects remain muted. In the current survey, 48%
respondents anticipated higher exports, 11% points lower than those stating likewise in the last round.
 Weak demand situation has been cited to be a concern by almost 71% of the companies in the present
survey and this has been a persistent concern for almost a year.

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Business Confidence Survey
August 2015
 Despite the Reserve Bank of India undertaking three rounds of cut in the repo rate in this calendar year,
cost of credit was reported to be a bothering factor by 58% of the respondents. In the previous round 55%
companies had stated likewise.
 It may be noted that the Banks have cut the lending rates by about 25-30 bps and we are yet to see a full
transmission of the cuts in repo rate.
 In addition, an increase was noted in the proportion of respondents citing threat of imports to be a
constraint. According to the survey results, 44% of the participants indicated rising imports to be a worry for
them, vis-à-vis 40% stating likewise in the last survey. The corresponding figure a year back was 28%. Those
indicating imports to be a concern belonged to sectors like steel and steel products, agricultural machinery,
textile machinery, food processing, electronic products, paper products, plastic products and chemicals.
Survey Profile

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Business Confidence Survey
August 2015
The survey drew responses from about 130 companies with a turnover ranging from Rs 6 crore to Rs 92,000
crore and belonging to a wide array of sectors. The survey gauges expectations of the respondents over the
period July to December 2015.
Detailed Survey Findings
FICCI’s Overall Business Confidence Index slips to a six quarter low
Current Condition vis-à-vis last six months
(Proportion of respondents)
0
10
20
30
40
50
60
70
80
90
Q1(2005-06)
Q3(2005-06)
Q1(2006-07)
Q3(2006-07)
Q1(2007-08)
Q3(2007-08)
Q1(2008-09)
Q3(2008-09)
Q1(2009-10)
Q3(2009-10)
Q1(2010-11)
Q3(2010-11)
Q1(2011-12)
Q3(2011-12)*
Q1(2012-13)
Q3(2012-13)
Q1(2013-14)
Q3(2013-14)
Q1(2014-15)
Q3(2014-15)
Q1(2015-16)
Current Conditions and Expectation Index
Current conditions index Expectations index
0
10
20
30
40
50
60
70
80
90
Q1(2005-06)
Q3(2005-06)
Q1(2006-07)
Q3(2006-07)
Q1(2007-08)
Q3(2007-08)
Q1(2008-09)
Q3(2008-09)
Q1(2009-10)
Q3(2009-10)
Q1(2010-11)
Q3(2010-11)
Q1(2011-12)
Q3(2011-12)*
Q1(2012-13)
Q3(2012-13)
Q1(2013-14)
Q3(2013-14)
Q1(2014-15)
Q3(2014-15)
Q1(2015-16)
Overallbusiness confidence index
Last
Round
Present
Round
Current
Condition
Index
65.2 61.0
Expectation
Index
77.2 68.9
Overall
Business
Confidence
Index
73.2 66.3
Steel Oil and Gas
Agricultural
Machinery
Plastic products
Electric
Machinery/Products
Real Estate &
Construction
Food Processing
Chemical
Paper& paper
products
Textiles
Trading and
Investments
CementHospitality
Broad Sectoral Coverage
Infrastructure
Overall Business Confidence Index value
moved down almost seven notches according
to results of FICCI’s latest survey. The index
value stood at 66.3 in the present round, vis-
à-vis 73.2 in the previous round. The decline
can be attributed to the slack noted in the
perception of the respondents both with
respect to current conditions (vis-à-vis last
six months) and near term expectations.

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Business Confidence Survey
August 2015
Results of FICCI’s latest survey report moderation in the proportion of respondents citing an improvement in
performance vis-à-vis last six months at the economy and firm level. 63% of the companies participating in
the survey reported ‘moderately to substantially better’ performance vis-à-vis last six months at the
economy level. In the last survey round the corresponding number was 77%. However, an increase was noted
in proportion of respondents indicating improved conditions compared to last six months at the industry
level. Further, in the current survey the proportion of participating companies reporting a ‘moderately to
substantially’ worse performance vis-à-vis last six months noted an increase at all the three levels- economy,
industry and firm. The increase was most perceptible at the level of industry, with the number of respondents
anticipating worsening going up from 3% in last survey to 23% in the latest survey.
Expected performance over next six months
(Proportion of respondents)
Further, according to results of FICCI’s latest Business Confidence Survey the buoyancy in expectations of
respondents with regard to performance at the economy, industry and firm level in coming six months also
indicated moderation. The proportion of respondents anticpating an improvement in performance over the
77
16
7
63
25
13
0
10
20
30
40
50
60
70
80
90
ModeratelytoSubstantially
Better
Same
ModeratelytoSubstantially
Worse
Economy
42
55
3
48
30
23
0
10
20
30
40
50
60
Moderatelyto
SubstantiallyBetter
Same
Moderatelyto
SubstantiallyWorse
Last Survey Present Survey
Industry
71
19
10
64
21
16
0
10
20
30
40
50
60
70
80
ModeratelytoSubstantially
Better
Same
ModeratelytoSubstantially
Worse
Firm
94
7
0
78
13 10
0
10
20
30
40
50
60
70
80
90
100
Moderatelyto
SubstantiallyBetter
Same
Moderatelyto
SubstantiallyWorse
Economy
87
13
0
71
20
11
0
10
20
30
40
50
60
70
80
90
100
Moderatelyto
SubstantiallyBetter
Same
Moderatelyto
SubstantiallyWorse
LastSurvey Present Survey
Industry
94
7
0
69
23
8
0
10
20
30
40
50
60
70
80
90
100
ModeratelytoSubstantially
Better
Same
ModeratelytoSubstantially
Worse
Firm

5. Page | 5
Business Confidence Survey
August 2015
next two quarters noted a decline at the economy, industry and firm level. The decline, however, was most
pronounced at the firm level.
Corporate Performance remains muted
Operational Parameters: Prospects over next six months
(Proportion of respondents in percent)
Key constraining factors for businesses
Weak demand persists to be a key constraining factor for businesses
Investment Sales Profit Export Employment
Last
Round
Current
Round
Last
Round
Current
Round
Last
Round
Current
Round
Last
Round
Current
Round
Last
Round
Current
Round
Higher 38 43 73 66 32 37 59 48 28 33
Same 59 49 23 26 65 46 32 26 69 61
Lower 3 9 3 8 3 17 9 26 4 6
The actual quarter 1 results of corporate performance were not too encouraging this fiscal year and it seems
the companies will still take some time to recover. An analysis of the responses received indicates that
performance of companies is expected to remain subdued over the near term.
Even though an increase was noted in the proportion of respondents citing an increase in investments and
profits in the coming six months, this was offset by a corresponding increase noted in the proportion of
respondents expecting these parameters to worsen over the near term horizon.
In the current survey, 43% of the respondents said that they expect higher investments over the next six
months, vis-à-vis 38% stating likewise in the previous round. However, the proportion of respondents
anticipating lower investments went up marginally to 9% in the present survey from 3% last time.
Likewise with regard to profits, while the proportion of respondents foreseeing higher profits increased to
37% in the current survey from 32% last time; those anticipating a decline increased to 17% from 3% in the
last survey.
In case of parameters like sales and exports a decline was noted in the proportion of respondents citing an
improvement over the coming six months.
As for the sales prospects, 66% of the respondents in the current round expected higher sales over the near
term, vis-à-vis 73% stating likewise in the last round.

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Business Confidence Survey
August 2015
Muted demand reflected in low capacity utilization rates and weak order book position
Though the proportion of respondents reporting demand as a constraining factor noted a marginal decline in
the present survey; nonetheless it continues to remain a concern for a significant majority of respondents.
71% of the participating companies reported weak demand to be a concern in the current survey round, vis-
à-vis 77% stating likewise in the previous round. This is a worrying trend and is also reflected in the low
capacity utilization levels and weak order book position of the companies. About 50% of the companies
reported that their current capacity utilization rate is below 75%.
Credit Situation
Cost of credit still a concern for 58% of the respondents
Interest Rate being charged by Banks (in %)
Threat of Imports
…rise in proportion of respondents citing increasing imports to be bothersome
23
41
44
26
38
35
0 10 20 30 40 50
Worse
Same
Better
Present Survey LastSurvey
Current order book position vis-a-vis last
two quarters
Capacity
Utilization
Last Survey
(% of
respondents)
Present
Survey
(% of
respondents
Less than 75% 48 51
More than 75% 52 49
Working Capital Loan Term Loan
Turnover
(Rs crore)
At
present
Six
months
back
One
year
back
At
present
Six
months
back
One
year
back
up to 500 12.3 12.7 13.0 11.3 11.6 12.1
over 500 11.7 11.9 11.7 11.3 11.1 11.3
Last Survey Present Survey
% of respondents citing weak demand to be a
concern
77% 71%
Last
Survey
Present
Survey
Availability
Cost
Credit
% of respondents
32
55
30
58
% of respondents

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Business Confidence Survey
August 2015
Respondents reporting imports to be a threat
belonged to the following sectors -
- Steel and steel products - Electronic products
- Agricultural Machinery - Paper products
- Food processing - Plastic products
- Textile Machinery - Chemicals
Threat of
Imports
Last Year Last
Survey
Present
Survey
Yes 28 40 44
No 72 60 56