Business Sentiment Regains Lost Ground

Business sentiment regains lost ground as more corporate leaders are willing to make investments over the next six months, finds the latest Business Today-C fore Business Confi dence Survey.

- Manu Kaushik

The effects of demonetisation seem to have dissipated. Soon after Prime Minister Narendra Modi’s decision to ban high value currency notes, India Inc.’s confidence had taken a severe beating. Barring the initial hiccup, the government has thus far tackled the currency shortage effectively. This has improved the overall business environment in the country.

The confidence level, on a scale of 100, soared to 49.6 in the JanuaryMarch quarter. It’s a significant jump from the last quarter, when it had slipped to 46.4, the lowest since the survey was started six years ago. The latest level, though, is still low compared with the previous year. For instance, it was 53.1 in the July September quarter and 51.5 in the quarter before that.

The revival in sentiment highlights the restoration of confidence among business leaders, who were unnerved by the impact of demonetisation. Market research agency C fore quizzed 500 chief executive officers and chief financial officers across 12 cities for the survey. The Business Confidence Index (BCI), was launched in the January-March quarter of 2011.

The survey points out that corporate leaders expect improvement on a bunch of parameters as compared to the previous survey. These include overall economic situation, overall business situation, production level, demand scenario, utilisation of production capacity, cost of external finance, sales, selling price, and profits.