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Small, medium units' business confidence declines

Business confidence among Indian micro, small and medium enterprises (MSMEs) has dropped by 2.5 percentage points to a value of 54.7 in the October-December quarter compared with the July-September quarter.

This was revealed in a recently concluded survey by the Confederation of Indian Industry (CII). The survey is calculated on the scale of 0-100, moving from unfavourable to favourable situation.

“Credit, whenever available, has been too costly and has scared many SMEs away. Several bankers have also admitted that if tight policies continue, the costs would be passed on to buyers,” said a CII release.

However, the situation is helped somewhat by some of the actions taken by the Government, such as announcement of the 2 per cent interest subsidy on rupee export credit to the labour-oriented SMEs to help them overcome the global market slowdown, CII said.

According to Mr Gurpal Singh, Deputy Director-General, CII, the decline in confidence is a matter of concern but it does not come as a surprise as the events around the world are taking a toll on the sector and industry as a whole.