India Inc's business sentiment has turned positive during the July-September quarter, surging to 50.3 from its lowest reading of 41.0 in the previous quarter of April-June as the government gradually unlocked the economy and business activity resumed, according to industry chamber CII's business outlook survey.
A score above 50 indicates positive confidence while a score above 75 is strong positive confidence. On the contrary, a score of less than 50 indicates a weak confidence.
The survey was conducted during August-September 2020 and saw participation of over 150 firms across different sectors, CII said.
Over half of the respondents said that the weakness in domestic demand is likely to be the topmost risk to business confidence in the next six months. Nearly 30% felt business activity may return to pre-pandemic levels by April-June of 2021.
But Covid apart, the data released by CII shows India Inc’s business confidence had begun to deteriorate since the beginning of the previous financial year itself. In the January-March quarter of the financial year 2019-20, the business sentiments ran as high as nearly 65.2. Thereafter, in the next four consecutive quarters, it remained below 60, before dropping to 41 in the June quarter for 2020-21.
CII Director General Chandrajit Banerjee said while a recovery is under way, it could be tremendously expedited through continued government support and handholding of businesses during this crisis.
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