Dun & Bradstreet released the Business confidence of India Inc for the July-September quarter which reported a drop of 4 per cent to 130.6 which the lowest level in four years. The data was bad due to several macro-economic challenges. All the six components of the index registered a decline from the second quarter, D&B said.
“Corporate confidence continues to wilt as the Indian economy remains saddled with several macro-economic challenges such as slowing industrial growth, elevated interest rates, and weak FII inflows in June '13 and higher current account deficit,” Dun & Bradstreet India President & CEO Kaushal Sampat said.
The recent sharp slid in rupee has had an adverse impact on the confidence. “While the Government has again started initiating reform measures, a strong and urgent push from the government towards resolving supply-side issues and project implementation bottlenecks will send out the right signals and pull the economy out of its current slump,” Sampat added.
He added that “much of the decline stemmed from the steep fall in optimism with regard to selling prices. Weak demand conditions are deterring firms from raising prices even as input costs remain high.”
The prolonged economic uncertainty has been further compounded by the rupee's sharp slide.
The rupee last week sank to an all-time low of 60.76 against the dollar on heavy capital outflows and month-end demand from importers.
“While the Government has again started initiating reform measures, a strong and urgent push from the government towards resolving supply-side issues and project implementation bottlenecks will send out the right signals and pull the economy out of its current slump,” Sampat said.