India’s business confidence down sharply amid COVID-19 outbreak

MUMBAI (XINHUA) – India’s business confidence sharply deteriorated as demand took a hit during the prevalent second wave of COVID-19 outbreak, according to a survey conducted by an industry body and released yesterday.

The Overall Business Confidence Index nosedived to 51.5 for the month of May after reporting a decadal high of 74.2 in the previous survey released in March, said a statement by Federation of Indian Chambers of Commerce and Industry.

India currently has a COVID-19 caseload of over 28 million, of which over two million are active cases with 329,100 deaths reported so far.

Around 70 per cent of participants in the survey reported weak demand conditions as a bothering factor as compared to 56 per cent in the preceding survey as household income was being severely impacted and past savings were already spent during the first wave of infections last year, said the statement.

Rising raw material cost was also a concern among the participants in the survey, among whom 31 per cent saw a decline in better sales prospects compared to 66 per cent in the preceding survey and thereby decline in higher profits.

The outlook on employment was seen deteriorating with only 19 per cent respondents expressing optimism about hiring over the next two quarters compared to 35 per cent in the preceding survey while exports prospects were also seen subdued.