ALSO READReduced Tax Liabilities under GST regime in comparison to present combined Indirect Tax rates Rationalise GST tax rates, simplify procedures: Cong states GST relief for SMEs, exporters; tax rates on 27 items cut Reduction/exemption of tax rates under GST for small businesses GST rejig:Tax rate on 178 daily items reduced to 18% from 28%
Overall business sentiment in the country witnessed a 12.9 per cent drop in October over July 2017 on a quarter-on-quarter basis, says a survey by economic think-tank NCAER.
The business sentiments survey was carried out in September 2017.
The National Council of Applied Economic Research (NCAER) in a report also said there was deterioration in political sentiments in October over July 2017 with the Political Confidence Index (PCI) showing a q-o-q fall of 12.4 per cent.
"The NCAER Business Confidence Index (N-BCI) fell by 12.9 per cent in October 2017 over July 2017 on a quarter-on- quarter (q-o-q) basis and 11.1 per cent on a year-on-year basis," the economic think-tank said in a statement.
The significant downturn in sentiments in September 2017 reflected the disquiet of the business sector from the on- going Goods and Services Tax (GST) Transition, it added.
"The decline in BCI was driven by deterioration in sentiments in all the four components of the BCI between July and October 2017 including 'the overall economic conditions will improve in the next six months (7.8 percentage points).
"The financial position of firms will improve in the next six months' (13.3 percentage points), 'the present investment climate is positive as compared with six months ago'(6 percentage points) and 'the present capacity utilisation is close to or above the optimal level' (7.7 percentage points)," the statement noted.
According to the statement, the BCIs of the consumer durables and the intermediate goods sectors declined by as much as 20.5 per cent and 14.1 per cent, respectively, on a q-o-q basis.
Besides, the BCI of the consumer non-durables and capital goods sectors declined moderately by 9.9 per cent and 9.2 per cent, respectively on a q-o-q basis.
While the BCI figures for the East and the West increased by 9.2 per cent and 7.5 per cent respectively, the corresponding figures of the North and the South showed declines of 37.5 per cent and 21.4 per cent, respectively on a q-o-q basis.
Noting that all the firm groups across size showed a decline in BCI between July and October 2017, the statement said.
The maximum decline of 18 per cent in BCI was seen for the Rs 110 crore firm groups, followed by those for the Rs 100500 crore firms, and for firms with annual turnovers of more than Rs 500 crore which registered declines of 17.1 per cent and 14.9 per cent, respectively.
Also, three of the four firm groups across ownership type showed a decline in BCI between July and October 2017, whereas the public sector companies exhibited a rise of 13.1 per cent in BCI in October over July 2017.
Stating that overall sentiments regarding production, domestic sales, exports, imports of raw materials, and pre-tax profits remained subdued in October versus July 2017, the statement said these subdued sentiments were broad-based, with all the sectors showing declining trends between the two periods.
The NCAER tracks the business sentiments of around 600 Indian companies to compute the composite Business Confidence Index (BCI).
The GDP growth in the second quarter of 2017-18 was 6.3 per cent, compared to 5.7 per cent in the April-June period -- the lowest growth rate since the Modi government took office.
It was 7.5 per cent in the September quarter of last fiscal.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)