India Inc’s business optimism for the July-September period touched an eight quarter high driven by initiatives like the clearance of Bankruptcy Code and reforms in Foreign Direct Investment front, says a report.
According to Dun & Bradstreet (D&B), India Inc’s business optimism stood at a 8-quarter high in the July-September period, while optimism for net profit was at a 7-quarter high.
“The focus of the Government on policy certainty, predictability and continuity has given a strong boost to business confidence in India Inc,” Kaushal Sampat, President & Managing Director – India, D&B said.
The D&B Composite Business Optimism Index(BOI) stood at 83.2 during third quarter of 2016, an increase of 6.7 per cent as compared to the corresponding period of last year.
“The sweeping reforms on FDI, the clearance of Bankruptcy Code, National Policy on Capital Goods and the launch of National IPR policy reflect the Government’s firm intent on boosting the investment climate and improving the ‘ease of doing business’ scenario in India,” Sampat added.
Moreover, the fall in stalled/shelved projects, pickup in new orders in sectors such as road, railways and power and marked increase in Parliamentary productivity have also buoyed the confidence level of Corporate India, Sampat said.
Meanwhile, the progress of the monsoon and the geographical spread of rains augur well for rural demand.
“The Government’s continued commitment to reforms, particularly the potential passage of the GST Bill during the Parliament’s Monsoon session, will be transformational in improving business confidence and stimulating investment,” he added.
For calculating the composite BOI, each of the six parameters – net sales, net profits, selling prices, new orders, inventories and employee levels – is assigned a weight.
The parameter weights are then applied to these ratios and the results aggregated to arrive at the Composite BOI.