Note ban hits India Inc’s biz confidence as sales plunge

NEW DELHI: Ahead of the Budget, a survey has revealed that India Inc’s business confidence slipped to a four quarter low as demonetisation pulled down performance and clouded its assessment of the economy.

According to Ficci’s latest Business Confidence Survey, the Overall Business Confidence Index (OBCI) slipped to a four quarter low of 58.2 vis-a-vis 67.3 in the last round as 4 out of 5 companies reported weak demand.

“The fall in overall index value was largely on account of the weakness that has gripped the performance of corporate India on account of demonetisation and their assessment of the current state of economy,” the survey said. A decline was noted in the proportion of respondents foreseeing higher sales. About 46 per cent respondents said that they expect sales to increase over the next six months as compared to 62 per cent in the previous round.

The survey was conducted between December 2016 and January 2017 to capture the assessment of the current situation as well as gauge expectations regarding performance for the next six months. It drew responses from about 207 companies belonging to a wide array of sectors.

Notably, the outlook of respondents on employment generation worsened with only 18 per cent of the surveyed firms anticipating an increase in hiring in the coming six months as against 31 per cent in the previous round.