India Inc’s business confidence has fallen 9.1% to 115.4 points in quarter four (Q4) of the financial year (FY) 2018-19, as per a survey by the National Council of Applied Economic Research (NDAER).
The Business Confidence Index (BCI) which is an indicator of business sentiments across the Indian industry segments plummeted for January to March 31, 2019, on a quarter-on-quarter (q-o-q) basis. However, the index dropped 12.2% on a year-on-year basis, the think tank’s survey showed. The BCI consists of four elements, all of which command equal weight age in computing the index.
While there hasn’t been any change in the business sentiments for the component, the overall economic conditions will be better in next six months, the same deteriorated for the other 3 components- the financial position of the firms will improve in the next six months, the present investment climate is positive, and the present capacity utilisation is close to or above optimal level.
The BCI dropped across all sectors on a q-o-q basis cuing towards a prevalent deterioration in the sentiments. The BCI of consumer durables and consumer non-durables sectors after manifesting improvement in January 2019, slumped by 12.1% and 15.9%, respectively on a q-o-q basis.
The Political Confidence Index (PCI) of businesses has gone up 12.1% on a quarterly basis in Q4. The PCI analyses the business sector’s confidence in the management of economic policies. India Inc has great deal of expectations from the ruling dispensation on handling economic growth, pushing economic reforms, sustaining a favorable political environment among other benchmarks.
