Monday, 14 May 2018
MSEs biz Sentiment Improves on Growth Prospects
India’s small businesses confidence continued to remain upbeat about their growth prospects buoyed by gains in the manufacturing sector in the January-March quarter.
According to a statement by the Press Information Bureau, the CriSidEx Index, which measures the business sentiment among micro and small enterprises, rose to 121 in the January-March quarter, reflecting a growing optimism among these firms over their business prospects. That compares with 107 in the three months ended December-its first reading that had indicated a mildly positive sentiment.
The CriSidEx index, developed jointly by Crisil and SIDBI, is based on a diffusion index of eight parameters -five manufacturing and three services -that have equal weights. It measures MSE business sentiment on a scale of 0 to 200.
India’s small businesses sentiment has started improving gradually after the jolt of demonetisation and then the implementation of Goods and Services Tax. Particularly the ones in the informal economy as the cash ban hurt consumption and then GST increased compliance burden.
Within manufacturing, chemicals, auto components, engineering and capital goods-related-small enterprises reported a better January-March period and are the most optimistic about the ongoing quarter. Segments with a significant presence in unorganised enterprises such as leather and leather goods, and gems and jewellery remained subdued.
Among commercial services and supplies providers, 21 per cent reported a subdued quarter, 48 per cent reported a satisfactory one, and 31 per cent reported a good quarter. The corresponding figures for the construction/real estate segments are 15 per cent, 62 per cent and 23 per cent, respectively.
Information technology and IT-enabled services, traders and healthcare providers had a healthy March quarter and are expected to continue doing well, but that is not so with logistics, construction and real estate-based businesses. The services sector remains optimistic, with most industries having only a single-digit share of respondents expecting a turn for the worse.
Unorganised MSEs also reported a slight improvement in performance. About 13 per cent of them, with less than 10 employees, reported a bad survey quarter compared with 22 per cent in October-December.
Meanwhile, lenders hold a neutral view for next quarter, with 9 out of 10 saying the overall business situation will be satisfactory.
As many as 7 out of 10 lenders did not find any change in the situation of MSE non-performing assets (NPA) accounts in survey quarter and majority of lenders do not expect an increase in NPA accounts in next quarter.
As far as new jobs are concerned, the services and manufacturing sectors are equally optimistic on employment with 15 per cent of respondents in each stating they added employees.
Latin Manharlal Group
Posted by Latin Manharlal at 03:54