Prospects of fresh hiring by the private sector "do not look bright" in the remaining part of 2017-18, with wage cost control being a key priority for India Inc, Assocham said today.
The chamber said that PSU banks would bring down their employee cost to operation ratio, post re-capitalisation by the government, and fresh hiring may come down there as well. The chamber based its assessment on the feedback received from its members.
"The focus right now is how to deleverage, consolidate, exit from non-core businesses and achieve a lean and mean balance sheet.
"Going forward, at least in the next quarter and a half, the corporates would be busy improving their margins and reducing their debt costs, even as the top line growth may take a back seat," it said.
However, Assocham believes that things should look up in the next fiscal.
It noted that most of the churning is taking place in telecom, financials -- including private banks and non-banking finance companies -- information technology, realty and infrastructure.
Assocham Secretary General D S Rawat said, "Though the Moody's upgrade has given a sentiment boost, the next two quarters would be challenging for the private sector."
He added: "But things will improve and some of the pain points of the present like high debt, slow consumer demand, should ease from April 2018. In any case, barring any untoward event, the fiscal 2018-19 would be better than the current financial year."
According to Assocham, the stock market boom, although triggered by a huge liquidity play, is also reflective of the uptick in economic growth, going forward.
Moreover, it said, the GST-related issues should be settled in the next few months.
The optimism stems from India' s sound macro indicators like moderate inflation, stability in foreign exchange, robust foreign exchange reserves and an improving trend line in exports, stated Assocham.
"However, a thing to watch would be crude oil prices which could be a spoiler if they move up significantly from the present level," the industry body cautioned.
It said some of the issues relating to agriculture like price fluctuation of crops and farmers' vulnerability are likely to be addressed in the coming Budget, with a focus on the rural landscape.