Rough Ride

Business confidence slides in the first quarter of 2018/19 as businesses feel the pinch of GST and brace for policy inaction and higher interest rates, finds the latest Business Today-C fore Business Confidence Survey.

- Manu Kaushik

It has been over a year since the implementation of the Goods and Services Tax (GST) and more than 20 months post demonetisation but the heat and dust has not settled. At least, that’s evident from the latest Business Confidence Index (BCI) survey conducted in the April-June quarter. Some 65 per cent business leaders surveyed are unhappy with GST while another 64 per cent remain critical of demonetisation.

In the June ending quarter, the BCI — on a scale of 100 -- dropped marginally to 49.3, compared to 50.6 in the previous quarter and 47.3 in the quarter prior to that. Market research agency C fore quizzed 500 CEOs and chief financial officers across 12 cities for the survey. The fall in the first quarter of 2018/19 highlights the reversal of an upward trend that started in the September quarter last year.

Most micro parameters of the survey have shown a decline as compared to the previous survey. These includes overall economic situation, financial situation, availability of finance, cost of external finance, cost of raw material, sales, production levels, order book, utilisation of production capacity and profits. For instance, 42 per cent respondents believe that availability of finance is going to be an issue in the July-September quarter. In the previous survey, the figure was 20 per cent.