The Indian business community is expecting the current global economic slowdown to result in a major economic crisis in the coming year, 2012. A recent survey shows that India businesses are holding on to their cash balances because of the fear that the slowdown would turn into an economic crisis in 2012.

According to a new survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI), the country’s corporates believe that the economic crisis will exist at least until the end of 2012. About half of the respondents said in the survey that the liquidity in the economy is not as worse as it was in 2008.

The survey on "The Global Meltdown and its Impact on Indian Industry" shows that about half of the Indian businessmen are holding higher cash balances due to economic uncertainties in the market.

This indicates that the corpoates are hoping for better times later on and are holding up resources for investment. On the other hand, businesses also tend to hold on to their ash when they perceive a tight liquidity situation in the economy, in order to meet requirements.

The survey was conducted in September and October 2011 and included member associations of FICCI and individual companies.