Biz confidence of India Inc declines from peak level: Survey

In the 75th round of the Business Expectations Survey (BES) carried out in December 2010, the NCAER-MasterCard Index of Business Confidence has declined by 2 per cent from its all-time peak level registered in October 2010.

"The decline in the current round of the survey may reflect the rising concerns- continued price shocks from the primary articles, particularly food items which are likely to affect consumer sentiments and the policy uncertainties created by issues of governance," the survey said.

It further said that the prevailing high inflation risk and consequent rise in input cost are clearly one set of factors adversely affecting the perceptions of investment climate.
However, despite the marginal drop in the latest survey, Business Confidence Index (BCI) continues to remain higher than the index scores in the past three year period, except in October 2010.

Inflation, particularly the food inflation, has been a concern for both the government and the common man. For past few months, food prices have been staying at very high levels.
The wholesale price food inflation rose to 15.57 per cent for the period ended January 15, on escalating vegetable prices, particularly, onions. It was at 15.52 per cent for the week ended January 8.

The overall inflation in December last year had also gone up to 8.43 per cent, up from 7.48 per cent in the previous month, mainly driven by costly food items.Besides, industrial growth plunged to an 18-month low of 2.7 per cent in November, 2010 from over 11 per cent recorded in the previous month

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