Business confidence in India improves during Q4 FY14: NCAER

Economic think-tank the National Council of Applied Economic Research (NCAER), in its latest report, has noted that the business confidence in last quarter of 2013-14 improved further on expectations of a new electoral mandate that buoyant the overall sentiments. The Business Confidence Index (BCI) in March quarter rose by about 3.8 percent from the previous quarter to 127 points, showing a second successive improvement in business sentiments. In line with the BCI, the Political Confidence Index (PCI) also showed improvement to 136.6 points in April 2014 from 112.9 points in January 2014. The NCAER’s report further highlighted that the macroeconomic and sectoral level improvements also helped to boost the business sentiments in the country. Moderating inflation rate, shrinking current account deficit and appreciation in rupee value against the dollar have all aided positive sentiments. During FY14, the CAD is likely to improve at around 2% of GDP level as against the record high at 4.8% of GDP in FY13 on the back of improved trade deficit figure. The expectation of improvement financial position of corporates was the main factor behind the increase in overall confidence, the report added. However, the lower ratings on investment climate remain the area of concern in the present survey. Presently, Indian economy is struggling with slowdown and the factors like high interest rates, low investments and slow execution of infrastructure projects have been impacting economy’s growth. Indian economy’s growth slowed down to 4.6 percent during the first three quarter of FY14 and is likely to remain at sub-5% level in FY14.