In a survey by the industry body FICCI, many good signs have been found regarding the Indian economy. The outlook for manufacturing activities has improved significantly in the second quarter of the current financial year. However, the cost of doing business and production has increased during this period.
According to FICCI’s latest quarterly survey on manufacturing industry people say that the cost of production has increased due to higher fixed costs, higher overheads to ensure safety protocols. At the same time, there has been a huge drop in production due to the lockdown.
According to PTI, the survey said that the overall cost has increased due to less capacity utilization, increase in freight charges and other logistics expenses, increase in raw material, power cost and higher interest rates.
The survey said that after a sluggish first quarter (April-June), the outlook for the second July-September quarter has improved significantly. Most of the people surveyed say that their business and cost of production are increasing.
On the export front, the survey has been said to improve. 58 percent of the participants said that their exports are expected to improve in the second quarter. At the same time, 68 percent said that they would not appoint additional employees during the next three months.
The survey includes the opinion of representatives of more than 300 manufacturing units of large and SME sector. The combined annual turnover of these units is more than Rs 2.7 lakh crore.