The overall business confidence index stood at 42.9 in the last quarter, compared to 59.0 in the previous quarter and 37.8 in Q2 FY09.
Prolonged lockdown due to coronavirus scare and countrywide frozen businesses have brought the confidence to the lowest level since the global financial crisis of 2008-09. Business confidence survey saw the sharpest fall in the confidence level of members of India Inc since the global financial crisis, according to FICCI. The overall business confidence index stood at 42.9 in the last quarter, compared to 59.0 in the previous quarter and 37.8 in Q2 FY09 during the global financial crisis. A downturn in the current conditions, as well as expectations about the future, were held responsible for the steep fall in business confidence.
The triple shock faced by most of the companies have also pulled down their confidence in the business outlook. India’s economy is struggling through a crisis in demand, supply, and financial channels. 72 per cent of the companies participating in the FICCI survey said that their operations have been hit hard by the virus outbreak and 90 per cent companies said that their supply chains have been impacted.
In order to improve the business environment in the country, FICCI has further suggested the government to provide a financial package for the entire industry (especially MSMEs) in the form of subsidies, policy support, tax holidays, a special dispensation of funds to sustain employment levels. Adding to it, it has also asked for immediate measures to instill confidence in decision-makers of banks and make the entire lending process swifter.
The industry body has also suggested the government to kick start a few large infrastructure projects to uplift credit and employment situation. Other suggestions include the direct purchase of corporate bonds by RBI, slashing repo rate further by 100 basis points, etc.