...dents biz op­ti­mism for June quar­ter

Financial Chronicle - - GLOBAL, NATIONAL -

The Rs 13,000-crore PNB scam and fis­cal slip­page are among fac­tors that have led to a sharp de­cline in busi­ness op­ti­mism for the June quar­ter, a re­port said on Mon­day.

The op­ti­mism was ris­ing in the Septem­ber quar­ter of last year and hit a peak of 91 per cent for the first quar­ter of 2018, in­for­ma­tion ser­vices com­pany Dun and Brad­street said in the re­port, adding it has slipped by 6.6 per cent to 85 per cent for the sec­ond quar­ter of the cal­en­dar year.

The re­port said the sur­vey of com­pa­nies was con­ducted in March, when the bank fraud cases had al­ready erupted on the scene and added that the frauds and scams came at an “in­op­por­tune” time when the state-run lenders were al­ready fight­ing the non-per­form­ing as­set (NPA) men­ace.

On the fis­cal deficit front, the over­shoot­ing of the FY18 and bud­get­ing for an el­e­vated tar­get for the next fi­nan­cial year have led to in­creased bor­row­ing by the gov­ern­ment, the re­port said, stress­ing on the need for the gov­ern­ment to fix its own bal­ance sheet along with that of the state-run banks.

Other fac­tors such as the squeeze on low-cost trade fi­nance due to the dis­con­tin­u­a­tion of the let­ter of un­der­stand­ing fol­low­ing the PNB scam, ris­ing pro­tec­tion­ism in the US that is mak­ing the ex­porters ner­vous and widen­ing of cur­rent ac­count deficit have also led to con­cerns, it said.

“All the above fac­tors might have im­pacted the sen­ti­ment of In­dia Inc as busi­ness op­ti­mism in­dex wit­nessed a de­cline from last quar­ter,” the re­port said. How­ever, when com­pared with the same pe­riod last year, the op­ti­mism in­dex has grown by 7.6 per cent, it added.

On a sec­toral ba­sis, the in­ter­me­di­ate goods sec­tor emerged as the most op­ti­mistic, while the con­struc­tion sec­tor the least op­ti­mist. There was a two per­cent­age point de­cline in the num­ber of peo­ple ex­pect­ing an in­crease in sale, five per­cent­age point de­cline in those ex­pect­ing an in­crease in net prof­its and a three per­cent­age point de­cline in the num­ber of peo­ple who feel their or­der book will be grow­ing.

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