Indian corporates are holding on to their cash and not investing due to the
prevailing economic uncertainty and fear that crisis will worsen in 2012, says a recent survey by the Federation of Indian Chambers of Commerce and Industry (Ficci).
The survey on 'Global Meltdown and its Impact on Indian Industry' reveals that the
uncertain economic outlook has resulted in 50 per cent of corporates holding on to higher cash balances.
"An increase in cash balances implies that corporates are holding on to their investment plans for better future opportunities. Alternatively, when credit is scarce, or expected to be scarce, firms hold on to more cash to meet any potential eventualities,"," the survey said.
Interestingly, nearly 82 per cent of the 50 per cent respondents were large corporates. Within the sample, Sectors like metals, cement, food and beverages, reported the maximum rise in cash balances.
About 83 per cent of the
respondents feared that Euro Crisis may turn more critical in 2012.
Courtesy: Mail Today
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