India Inc business confidence has plunged to the lowest level in 17 quarters - reminiscent of the 2008-09 financial meltdown (global financial crisis) - as cost and availability of credit constrain growth in a weak demand scenario, says a Ficci survey.
The industry body said overall business confidence index has fallen to 49.0 in the survey period, highlighting the significant moderation in the performance of companies vis-à-vis performance over the previous six months.
The participating companies are not too optimistic about the near term performance either, it added.
"A discernible increase is seen in the proportion of respondents reporting a 'moderately to substantially worse' performance at the economy and industry level going ahead," according to Ficci's Business Confidence survey, which was conducted during the months of July and August, 2013.
The slide in the confidence level of corporate India continued for the fourth successive quarter.
About 72 per cent of the participating companies cited high cost of credit as a major concern and a factor constraining growth, while 38 per cent said that availability of credit was an issue, the survey revealed.
Going forward, the companies suggested measures like expediting stalled infrastructure projects, simplifying policies and procedures in conducting business, implementation of Goods and Services Tax (GST) and a cut in interest rates by the RBI to kick start investments and propel growth.
The new Reserve Bank of India (RBI) Governor Raghuram Rajan will release its next mid-quarter monetary policy review on September 20.
Further, the surveyed firms indicated they would be comfortable paying an average interest rate of 9.4 per cent on working capital loan and 8.9 per cent on term loan in the current situation.
Moreover, 67 per cent of the participating companies said that they do not intend to hire in the near term and their workforce is expected to remain at the current levels.
"The outlook with regard to sales, profits and exports remains subdued, with a majority of respondents anticipating no change from the current levels in the next six months.
"The participating companies are not too optimistic about the near-term performance either," the survey said.
The companies surveyed also said that the sharp fall in the value of the rupee has affected their input costs, which in turn has lowered their profitability.