Business sentiments, which were already weak to start with, worsened further in the fourth quarter of 2019-20 amid the coronavirus crisis, economic think-tank NCAER said.
It carried out a Business Expectations Survey in March 2020.
NCAER's Business Confidence Index (N-BCI), an indicator of business sentiments across Indian industry, stood at 77.3 in Q4 of 2019-20.
In a release, NCAER said the N-BCI fell from 111.2 in the third quarter of 2019-20 to 77.3 in next three months, declining by 30.4 per cent on a quarter-on-quarter (q-o-q) basis and by 32.9 per cent on a year-on-year (y-o-y) basis.
This was the lowest level of BCI recorded since the 25th Round of the BES in 1998, coinciding with the Asian Financial Crisis of 1997-98, when it had fallen to 68.3, it said.
All the four components comprising the BCI -- overall economic condition, investment climate, firms' financial position and capacity utilisation -- experienced deterioration in sentiments on a quarterly basis, it said.
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"A weekly examination of the four components showed that business sentiments took a turn for the worse during the fourth and fifth weeks of March, 2020, coinciding with the announcement of the first COVID-19 lockdown on March 24, 2020," NCAER added.
As per the release, sentiments regarding production, domestic sales, exports, imports of raw materials, and pre-tax profits also worsened in April 2020. About one-third of respondents expected a decline in each of these parameters.
The firms also perceived that the costs of raw materials, electricity, and labour, and ex-factory prices would rise in the next six months. Sentiments regarding hiring in the labour market were muted, said the think-tank, established in 1956.
NCAER further said the Political Confidence Index (PCI) fell from 96.2 per cent in January 2020 to 73.7 per cent in April 2020, falling by 23.4 per cent on a q-o-q basis and by 31.3 per cent on a y-o-y basis.
Six components showed deterioration in sentiments -- managing the exchange rate, overall economic growth, managing inflation, pushing economic reforms forward, external trade negotiations and managing government finance.
However, sentiments improved in the case of two components -- managing a conducive political climate and managing unemployment.