'India business climate in revival mode'

Sep 25 2012, 22:04 IST
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'India business climate in revival mode' (Reuters) 'India business climate in revival mode' (Reuters)
SummarySome concern areas remain, but data shows a revival is in the works, says BluFin.

The country's business climate seems to be improving with latest trends especially in demand for goods and services indicating early signs of revival, says a report.

The BluFin Business Cycle Indicator (BCI)--that reflects various macroeconomic trends on a monthly basis-- rose to 157.4 in September, slightly higher than 157.8 recorded in August. This is the second consecutive monthly growth.

"The key factors contributing to the improvement in BCI in September continues to be data related to intermediate goods and services, which are traditional leading indicators of the business cycle.

"However, what is concerning right now is weakness in the consumer sector. In addition, significant weakness appears in sales of two wheelers and four wheelers. Domestic air traffic has also been weak ," financial information provider BluFin said today.

The latest BCI -- designed to ascertain turns in the business cycle -- readings come at a time when the Indian economy is showing signs of a slow down amid a host of issues, including global uncertainties and high inflation.

The index takes into account five broad areas Ė capital markets, foreign trade, policy, real economy and survey.

Going by September readings, there has been improvement in production across almost all basic and intermediate goods including aluminium, copper, iron ore and cement. There are also indications of a rise in demand for basic goods like steel and rubber.

Revenues from foreign tourists have also shown some improvement, BluFin said.

It further said: "Confidence in the economy should improve after the recent fiscal policy announcements aimed at the consolidation of expenditures and reform biased towards a relatively free economy. However, for confidence to generate actual growth in the economy, it is crucial that these announcements be implemented reasonably soon".

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