JOIN USBiz confidence in India shows no recovery: NCAER
Despite the government taking measures to pep up the economy, the Business Confidence Index in India has seen no recovery in September 2012, according to the latest National Council of Applied Economic Research (NCAER) - MasterCard Worldwide Index of Business Confidence.
High inflation, low industrial growth, a high current account deficit, coupled with a sharp currency depreciation have affected business sentiments adversely, the latest NCAER survey of Business Confidence said.
Going forward, it, however, sounded optimistic on the back of the government taking measures to improve the economic health of the country.
“The fresh wave of political decisions in mid-September, which included increase in the prices of diesel and limiting cap on subsidised LPG to check large subsidy outgo, and FDI-related measures may improve business sentiments in the coming months,” it said.
The prevailing low level of business sentiments is also consistent with the weak economic performance data. The GDP growth rate declined to 5.3 per cent in the second quarter of 2012-13. The decline in GDP growth is mainly due to the drop in the growth of agriculture, manufacturing and mining sectors. IIP, another barometer of economic activity, fell 0.4 per cent in October 2012 from a year earlier, far below market expectations. The survey, which looks at trends within firm-specific business outlook indicators, also includes a Political Confidence Index (PCI) and a special section on credit scenario. It also expressed concerns on the moderation of economic growth along with high and stubborn inflation, which it said appeared to be the main concern in business operations.
Other issues, which dampened business sentiments were elevated interest rates, weak global economy, widening fiscal deficit and policy stagnation, the survey suggested.