Tamil Nadu has been found to be one of the top three preferred investment destinations in India in a business survey conducted by Associated Chambers of Commerce and Industry of India (Assocham). The ranking was done on the basis of investment promotion, the government's strategies and the efficiency of the bureaucracy. The two other states in this category were Gujarat and Maharashtra. The investment promotion strategies of these two states were worthy of emulation by others, it was felt.
The aim of the survey entitled ‘Bizcon' is to understand the current business trends and perceptions and also to guage the business mood and the state of the economy.
The report warned that premature withdrawal of stimulus measures and the anti-inflationary measures pushing up the cost of credit to prohibitive levels, are posing domestic policy risk to the business sector whose manufacturing performance in recent months has been impressive largely owing to the stimulus package.
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In an analysis of the business confidence across regions, the study found that firms from the East and the South were more pessimistic about the present financial position as compared to those in the other two regions. Capacity utilisation too is expected to be the lowest in the South and the East in the next six months.
Overall business confidence was found to be lagging behind the overall macroeconomic environment. Some firms are yet to see improvements in their financials despite economic recovery taking place.
The survey predicted increase in prices of consumer goods as also profits in the short-run across sectors. “Government policies rather than market conditions are the major conditions on investments. Bureaucratic approvals, infrastructure shortfalls and land acquisition problems are the most important investment constraints it was found.”
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