India Inc confident, feels NCAER

Business confidence index rises to 143.1 in April

India Inc's business confidence has improved in April after Indian economy showed resilience in overcoming adverse impacts of global oil price rise and deficient monsoon, and yet slated to grow by 6.9 per cent in 2004-05.

According to economic think-tank National Council for Applied Economic Research (NCAER), the business confidence index touched a new high since 1995 at 143.1 in April, which is half a percentage point higher than that in January.

The political confidence index had also marginally up from the last round of survey to 119.5 points, the NCAER said.

Overall economic conditions and investment climate register a higher rating in the present round, despite expectations of lower financial performance and improvement in capacity utilisation as compared to January 2005.

Companies in the south were pessimistic this time while the east, west and north region were bullish, the NCAER said in its latest business expectancy survey.

It also said overall economic conditions and investment climate register a higher rating in the present round, despite expectations of lower financial performance and improvement in capacity utilisation as compared to January 2005.

The service sector continue to rule the roost both in confidence and economy. The survey said services were the most optimistic at this time followed by intermediate goods registers an increase in the business confidence index by 5 and 3.1 per cent, respectively.

"After turning quite optimistic in the previous round, public sector firms have turned pessimistic in the current round. This flip-flop perhaps reflects their perception of the short-term future," the council said.

The research unit pointed out that while wages of managerial and skilled workforce were expected to decline during the next six months, while the same would move up for the unskilled worker.

The survey found more and more firms are looking to hire a managerial and skilled workforce in the current round as compared to previous round.

Confidence on exports remained strong by the firms but the same is not reflected in their sales and production growth projection for the coming next 6 months.