NEW DELHI, Oct 24: Corporate India’s business optimism for the October-December quarter improved marginally on expectations of higher festive season demand, implementation of the 7th Pay Commission awards and increase in minimum support price (MSP) of Kharif crops, a report said Wednesday.
For the October-December quarter of this year, the Dun & Bradstreet Composite Business Optimism Index stood at 79.5, registering an increase of 3.6 per cent as compared to the year-ago period.
“Aspects that appear to improve optimism levels are expectations of higher demand given the festive season, implementation of the 7th Pay Commission awards, reduction in the GST rates on selected commodities and increase in MSP of Khariff crops,” said Manish Sinha, managing director – India, Dun & Bradstreet.
The report said that optimism for net profits stood at 65 per cent, an increase of 9 percentage points as compared to the same period a year ago, while optimism for new orders stood at 70 per cent (up 5 percentage points) and optimism for volume of sales at 75 per cent (up 4 percentage points).
Regarding the marginal rise in business optimism index, Sinha said high non-performing assets (NPAs) in the banks, the tightening of liquidity, depreciation in rupee, firming of crude oil prices and geo-political issues and trade wars is expected to have tampered business sentiment.
“Going forward, the index will depend upon the unfolding of further information or regulations on the NBFCs following the recent default by a systemically important NBFC which is likely to add to the cautiousness amongst businesses, especially MSMEs, as they are largely funded by this segment,” Sinha said.
The index arrived at this on the basis of a quarterly survey of business expectations. (PTI)
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