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The government’s steps to boost growth seem to have cut no ice with industry. Surveys by the Reserve Bank of India (RBI) showed business sentiment remained weak and expectations of an improvement fell.
RBI’s Industrial Outlook Survey conducted during the quarter ended June showed business sentiment weakened during this period; the Business Expectations Index stood at its lowest in three financial years.
In its Macroeconomic and Monetary Developments report, the central bank said macroeconomic conditions had distinctly worsened in the first quarter and there was no evidence of a recovery in growth, even as headline inflation had moderated.
Surveys by various business orgnisations showed business confidence had weakened. According to a survey by the Federation of Indian Chambers of Commerce and Industry, stiff global economic outlook, weak demand and the cost of credit continued to be concerns.
For the quarter ended June, the Dunn and Bradstreet Business Confidence Index declined 7.8 per cent compared to the previous quarter, owing to uncertainty in economic outlook (both external and domestic) and constrained pricing power due to weak demand. Confederation of Indian Industry said economic and political instability, high corruption and infrastructural and institutional shortages were the three primary concerns of firms.
However, RBI said the latest NCAER survey showed some improvement on a quarter-on-quarter basis, though it continued to decline annually.
While the seasonally adjusted HSBC Markit Purchasing Managers’ Index (PMI) for manufacturing improved marginally in June, PMI for services declined. The input and output price indices for both the sectors increased.
