BRIEF in collaboration with Federation of India Chambers of Commerce and Industry (FICCI) carried out a Business Perception Study of Indian Industry, to gauge the business climate as felt by the Micro Small and Medium Enterprises (MSMEs).
The objective of the study was to understand industry’s growth perceptions and expectations of Indian industry players. More specifically, the study envisaged an understanding of the growth perceptions and expectations of Indian industry players on broader parameters like cost of production, industrial policy, economic growth, fiscal, monetary and trade policies, inflation and employment. The policies and the schemes of the government that interface with activities of the small firms were specific to the subject matter of the survey inquiry, which covered 78 per cent of firms with turnover less than Rs. 100 crore.
The respondents from the firms with lowest turnover range expected better growth in the next two years compared with next six months while respondents from the firms in the higher turnover range believed in negligible growth.
There is broad consensus on some of the crucial aspects. First, Indian tax structure is not conducive to help business growth, and the same is true for the indirect taxes imposed by the government. A rollout of GST is anticipated to bring in a sea of changes in the current distortionary tax regime. Second, there is a broad agreement on exchange rate intervention to plug the slide of Indian currency.
Indian industry, the pillar of the Indian economy is passing through a challenging phase. The industry which is one of the strongest influences on GDP has not been performing to the level it did, especially during the 10 years of steady 8% growth. But perception of the Indian industry, specifically that of MSMEs is positive and a comforting outlook on the future of this segment of the industry. There is no doubt that there are issues and challenges affecting growth, but regardless of these obstacles, the MSMEs believe that not only can the industry improve but it can carry, on its shoulders, a part of the economy as well.