The economy could be entering a new investment cycle as most Indian companies are planning fresh investments.

A survey of 248 companies, conducted by the Federation of Indian Chambers of Commerce and Industry, shows that 89 per cent of the respondents have fresh investment plans in the near future.

While 20 per cent of the respondents will finance 50-60 per cent of their total project costs through debt; 22 per cent will use debt sources to provide for 60-70 per cent of their expenditures.

Another 24 per cent will avail the debt sources to the tune of 70-80 per cent of their planned investments.

The survey was carried out during February-March among 248 companies with a turnover ranging from Rs 1 crore (Rs 10 million to Rs 50,000 crore (Rs 500 billion).

The respondents came from a wide range of industries including paper, cement, automobiles, consumer electronics, textiles, petrochemicals, iron and steel and pharmaceuticals.

Of the various sources of debt, term-loans from banks were seen as the most favoured.

As many as 80 per cent of the respondents were of the opinion that the revival and strengthening of the domestic financial institutions were extremely important for supporting the investment programmes of the Indian industry.

The survey also suggests that if a portion of long-term funds such as provident funds, pension, gratuity and postal savings funds is made available to development financial institutions, it will facilitate corporate financing in a big way.

Also, many companies have strongly called for the revival and strengthening of the development financial institutions for supporting the investment programmes of Indian companies.

Meanwhile, universal banks are not being seen as adequate help for project financing.