India Inc's business confidence has dropped 9.1% to 115.4 points in quarter four (Q4) of the financial year (FY) 2018-19, according to 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 plunged for January to March 31, 2019, on a quarter-on-quarter (q-o-q) basis. However, the index slumped 12.2% on a year-on-year basis, the think tank's survey showed. The BCI comprises four elements, all of which command equal weightage in computing the index.
While there virtually was no 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 fell 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.
Meanwhile, the Political Confidence Index (PCI) of businesses has increased by 12.1% on a quarterly basis in Q4. The PCI assess the business sector's confidence in the political management of economic policies, India Inc's expectations from the ruling dispensation on handling economic growth, pushing economic reforms, sustaining a favourable political environment among other benchmarks.