Parliament's Winter Session key to investor confidence: D&B

New Delhi: The Winter Session of Parliament holds the key for business optimism in the country amid muted investments, a weakening rupee and slower-than-anticipated pace of reforms, a Dun and Bradstreet report says.

The recovery in the Indian economy is "still fragile"and the confidence of the business community remains tempered, it added.

"Deficit rainfall and subdued rural demand pose another threat to the recovery process while retail inflation has edged up led by higher prices of food," Dun and Bradstreet India Senior Economist Arun Singh said.

Singh further said that while the government has taken certain measures to revive investment and ensure flow of funds to infrastructure projects, it needs to pro-actively take the reform agenda forward.

"Progress of the Winter Session of Parliament is expected to impact the business optimism and revive investor confidence in the short term," he added.

The session beginning on November 26 is set to be a stormy affair, with the Opposition buoyed by the Bihar results getting ready to confront the government on a host of issues, which could push back efforts for an early passage of key legislations, including GST.

As per the report, deficit monsoon, the increase in MSP in wheat and some of the winter-grown pulses, along with the weakening of the rupee, are likely to contribute to upside risks to inflationary pressure, going forward.

According to official figures, retail inflation rose to 5 percent in October while the wholesale price index (WPI) contracted to 3.8 percent during the month.

Further, an expected revival in domestic demand and concerns around imported inflation might stoke inflationary expectations, D&B said.

It expects WPI inflation to be in the range of (-)3.3 percent to (-)3.10 percent in November.