Optimism back for corporate India as manufacturing activities show signs of a pick up

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India’s manufacturing sector is expected to regain the lost momentum in the fourth quarter after showing reasonable pick up in the third quarter, a Ficci survey said.</p>
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The survey has been drawn based on responses from over 300 manufacturing units from both large and segments categorised as small and medium enterprises with a combined annual turnover of around Rs 5.3 lakh crore.</p>
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The survey revealed that the overall capacity utilization in manufacturing has witnessed a rise of 74 per cent as compared to 65 per cent in the previous quarter.</p>
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High raw material prices, high cost of finance, shortage of skilled labour and working capital and high logistics cost are a few impediments that have come up in the way of expansion plans of corporate India.</p>
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Besides lack of financial assistance, uncertain demand scenario across globe, complex procedures for obtaining environmental clearances, high power tariff are also affecting operations.</p>
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The cost of production as a percentage of sales for manufacturers has also shown a rise. Industry respondents have attributed the hike in productions costs primarily to high fixed costs, higher overhead costs for ensuring safety protocols, drastic reduction in volumes due to lockdown, lower capacity utilization, high freight charges and other logistic costs, increased cost of raw materials, power cost, high manpower costs, energy costs, rupee depreciation and high interest rates.</p>