The recently done survey by Federation of Indian Chambers of Commerce and Industry (FICCI) maintains that India Inc's business confidence is continuously shrinking and currently reported at 7-year low.

Tight monetary policy, liquidity crunch, slow demand and economic downturn adversely impacted confidence of business community.

The survey for the second quarter of 2008-09 maintained that 52 per cent companies are not optimistic about economic normalcy in near future. They believe that situation may worsen further in coming six months leading to lower demand and large scale retrenchments. Nearly 90 per cent of the 412 companies surveyed said that industry should be ready for tougher economic situations.

Meanwhile, the "current conditions index" also declined first time since the inception of the FICCI Business Confidence survey in 2002. The Expectations Index declined to
44.3 in the present survey as compared to its value of 55.9 in the last survey. Thus, the overall business confidence slipped to 37.8 against 52.5 in the last survey.

On further retrenchments, the survey maintains, "About 57% of the companies have reported that to bring down costs, they are reducing the number of casual workers. As many as 68% of those surveyed have decided or are looking at the policy, not to fill up vacancies for the time being."