After the brutal second wave of Covid 19 that hut the country in the first quarter of the current financial year, business sentiments are finally showing signs of an overall improvement.

Industry body Ficci’s latest quarterly survey on manufacturing for the second quarter of the current financial year showed that after experiencing subdued first quarter outlook has improved significantly as most of the respondents surveyed reported higher production in July-September quarter of 2021-22 was much above the 50 per cent mark- around 61 per cent.

This was significantly higher than the similar percentage of last year’s Q-2 quarter — around 24 per cent, a statement by the industry body said.

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This assessment is also reflective in order books as 72 per cent of the respondents in July-September 2021-22 expected higher number of orders vis-à-vis April-June 2021-22.

Despite being hit by the Covid wave, India posted an impressive 20.1 per cent in the April to June quarter aided by a low base. The focus, for the government now is to avert a third wave. It has already pressed the pedal on the aggressive vaccination drive.
“The focus is on economy as the number of Covid 19 cases continue to remain under control. For that we will remain on course to bring in more reforms and continue with the vaccination drive,” Gopal Krishna Agarwal, BJP’s national spokesman told India Narrative.

However, what would still be a cause for concern is the hiring outlook. Several sectors are still not opening up new recruitments. The overall capacity utilization in manufacturing was 72 per cent in Q2 2021-22, which again reflects signs of recovery in manufacturing. The future investment outlook however remains that of cautious optimism, as 32 per cent respondents reported plans for capacity additions for the next six months.

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A higher cost of doing business continues to irk the industry. According to the Ficci survey, high raw material prices, high cost of finance, uncertainty of demand, shortage of skilled labour and working capital, high logistics cost, low domestic and global demand due to imposition of lockdown across all countries, excess capacities due to high volume of cheap imports into India, unstable market, high power tariff, are some of the major constraints which are affecting expansion plans of the respondents.