Ease of Doing Business for MSMEs: Business confidence amongst India’s small enterprises remained excessive with a majority of small and medium companies anticipating enchancment within the second quarter of 2022 on a lot of the parameters together with gross sales, capability utilisation, and hiring, in keeping with a survey by Assocham and Dun & Bradstreet. 77 per cent of the respondents surveyed anticipated a rise of their web revenue in Q2 2022 whereas 78 per cent anticipated ‘normal’ entry to credit score whereas 5 per cent anticipated it to be straightforward and 17 per cent believed it to be tough through the quarter. Importantly, the common capability utilisation price was anticipated to leap to 63 per cent from 57 per cent throughout Q1.
The capability utilisation price is actually the proportion of most financial output that may be achieved with put in capability in comparison with the precise output.
77 per cent respondents mentioned a rise in gross sales quantity was anticipated throughout Q2 whereas 76 per cent anticipated a probable soar in workforce dimension as effectively. SMEs had been additionally upbeat about home and export orders as 75 per cent and 86 per cent respondents anticipated a rise on respective fronts.
“The high level of optimism on export orders could be a result of the Comprehensive Economic Partnership Agreement that India signed with the United Arab Emirates and the Economic Cooperation and Trade Agreement with Australia, as well as the prospects of similar agreements with the UK and Canada in 2022 and 2023,” the survey mentioned. These agreements are more likely to enhance export of agricultural merchandise, footwear, gem & jewelry, leather-based, and textiles.
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The index, which measured the extent of optimism of SMEs on numerous enterprise parameters, stood at 87 for Q2 2022. An index worth above 50 alerts an enchancment or improve within the forthcoming quarter in comparison with the identical quarter within the earlier yr, the survey mentioned. However, the entire variety of respondents was not talked about within the survey report.
Among different key findings from the survey included 77 per cent respondents anticipated a rise of their new mounted capital funding, indicating optimism for future demand. 80 per cent SMEs additionally anticipated uncooked materials costs to extend whereas 75 per cent anticipated to extend their promoting costs. “This indicates that not all producers may be able to pass on higher raw material prices to consumers,” the survey famous.
In phrases of the elements limiting manufacturing for SMEs had been financial uncertainty for 59 per cent respondents, excessive home competitors cited by 19 per cent respondents, and lack of uncooked supplies in keeping with 16 per cent SMEs.
“Energy prices have reached their highest level since 2008 as a result of the Russia-Ukraine crisis, while base metals prices have reached a record high. The combination of rising input costs and increasing freight expenses is a key source of concern for businesses,” the survey added.
Source: www.financialexpress.com”