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India Inc's biz sentiment declines on gloomy economic scene

Last Updated: Wednesday, August 22, 2012 - 21:12

New Delhi: Corporate India's confidence level has declined during the quarter ending June mainly on account of economic slowdown and apprehensions over investment climate, says a survey.

According to the NCAER MasterCard Worldwide Index of Business Confidence, the confidence of India Inc declined by 6.2 percent over the previous quarter to 126.6 points, at the end of June from 134.9 points in the March quarter.

"The present round of the survey reveals weakened capacity utilisation for all categories of firm size.
While economic conditions and financial position are still the main area of concern for middle and larger sized firms, investment climate remains the issue for larger categories of firm size," the survey said.

The survey measures business confidence on four indicators -- overall economic situation six months from now, financial position of the firm six months from now, investment climate and level of current capacity utilisation.

"The decline registered by the present round of survey is all-pervasive with all the four components of BCI registering a decline in the optimism level. The lower business sentiments reflect the impact of slowdown in the economy," the survey said.

India's GDP growth slipped to a nine year low of 5.3 percent in the March quarter of 2011-12, mainly due to poor performance of the manufacturing sector.

The survey has found weakened business sentiments in all regions except South where it says the situation has improved.

Capacity utilisation shows decline across all the regions. Besides, investment climate is also not favourable, especially in the East and the West.

The survey also focuses on political confidence index (PCI), which has dropped further in the June quarter by 12.9 percent over March. The recent survey showed a drop in the ratings of six of the eight components of PCI.

The six indicators include managing overall economic growth, government finances, unemployment, exchange rates and pushing ahead of economic reforms.


First Published: Wednesday, August 22, 2012 - 21:12
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