Such market-driven pricing of products and factors combined with gradual reduction in rates of interest in an overall benign interest rate environment and moderate debt equity ratios have resulted in lower interest outgo. This, in turn, has promoted better resource allocation and efficient use of new technology, which has become reflected in their profit and efficiency parameters.
What has been the result in terms of corporate performance? All the important parameters: sales, gross profit, profit after tax, all have recorded robust growth rates since 2002-03, implying that economic activity in the corporate sector has improved tremendously over this period (Table 5). The dependence on banks for financing has indeed gone down.