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Informist, Monday, Jan. 20, 2025

NEW DELHI – The interim result of a survey conducted by the Confederation of Indian Industry over the past month showed that 70% of the polled companies said they would invest in 2025-26 (Apr-Mar). Only 59% said they were going to invest in Oct-Mar, the survey of 309 firms showed. 

 

This was after 75% of the polled firms said the current economic environment was somewhat or very favourable for private investors. Only 6% of the firm views the investment climate negatively. At least 1% of the surveyed companies said they had invested over INR 5 billion Apr-Sept and Oct-Mar of FY24 and the first half of FY25, with the largest subset of companies investing less than INR 50 million in each of the three periods.

 

The results of the survey come after data at the end of November showed India's GDP growth in Jul-Sept fell to a seven-quarter low of 5.4%, significantly below analyst estimates. The RBI consequently cut its GDP growth forecast for FY25 by 60 basis points to 6.6%. Multilateral agencies including the International Monetary Fund and World Bank expect India's GDP growth in FY26 at 6.5% and 6.7%, respectively. 

 

Around two-thirds of the firms were in the manufacturing and mining sectors, while 28% were services firms and a minority were in agro and food processing, the survey showed. About half of the firms had a turnover of INR 50 million-INR 750 million, with 31% medium-term firms and 21% having turnover over INR 2.5 billion.

 

These firms expected their planned investments in the next year to drive up their existing direct employment by 16-18%, with the indirect workforce up by 13-14%. Hiring activity had increased in 79% of the companies over the past three years, according to the responses, with only 5% saying it had decreased.

 

In FY24, three-quarters of the firms added less than 20% to their existing workforce, but only 3% saw declines. The rest grew their workforce above 20%. A similar pattern was expected in FY25 and FY26, the survey showed. 

 

Meanwhile, wages across a majority of roles between senior management down to regular workers increased by up to 20% in FY24 and FY25, the surveyed firms said. Companies reporting declining wages were minuscule in both the years, though a negative outlier emerged with contractual workers. There was no change in wages for contractual workers for 12% of firms in FY24 and 11% in FY25, according to the industry survey.  End

 

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

 

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