2019-08-11_Business_Today

umbai-based

Rajni Thakur

is an economist

working for RBL

Bank. She spends

40 per cent of

her work time interacting with clients

hailing from automotive, start-up, soft-

ware, textiles and other sectors, and

every week helps 150-odd clients take

calls on interest rates and transactions

in foreign exchange. Thakur says her

clients’ confidence level has dipped

sharply over the past six months. “Be-

fore elections, there was a sense that

things would get better after polls were

over. But during this earnings season,

most of the management-speak has

been around how consumption is going

to slow down. Nothing fundamentally

has changed in the economy, but we see

negative sentiments,” she says.

The weak sentiment of her clients

seems to echo in the latest Business

Confidence Index (BCI) survey con-

ducted for the April-June quarter. The

BCI for the quarter went down for the

second consecutive time as corporate

India gave the thumbs down to the

Union Budget and remains sceptical

of consumption pick-up and future in-

vestments. The BCI – on a scale of 100

• declined to 48.5 compared to 49.7 in
  the previous quarter and 50.5 in the
  quarter before that. Market research
  agency C fore quizzed 500 CEOs and

CFOs across 12 cities for the survey.

“Some headwinds are pulling the

sentiment down and high-frequency

data is showing weakness. The first

quarter of the current fiscal is not likely

to be good and that is getting reflected

in sentiment,” says D.K. Joshi, Chief

Economist at CRISIL.

The survey shows that a large num-

ber of respondents believes there will

be status quo in overall business situa-

tion, financial situation, sales, produc-

tion level, order book, supply side, raw

material inventory and hiring in the

current quarter. Some respondents are

expecting the situation to worsen in ar-

eas such as overall economic situation,

availability of finance, working capital

August 11I 2019 I BUSINESS TODAYI 43

M

BCI by

Sector

Heavy

engineering

is most

downbeat

Services Light

industry

Heavy

engineering

50

.^6
50
.^4
48
.^6

Oct-Dec 2018 Jan-Mar 2019 Apr-Jun 2019

*Big businesses: Turnover > `500 crore; Medium businesses: Turnover `100-500 crore; Small businesses: Turnover `5-100 crore; Micro businesses: Turnover < `5 crore

49

.^5
50
.^1
51
.^7
47
.^9
48
.^6
49
.^2 BCI by
Size*
Only big
businesses
report a score
above 50

Big

businesses

Medium

businesses

Small

businesses

Micro

businesses

50

.^6
51
.^2
52
.^5
49
.^3
50
.^5
51
.^4
47
.^4
48
.^6
49
.^8
48 47
.^1
48
.^6

No Macro Cheer

Inflation is the only bright spot among major economic parameters

Inflation Under Control

CPI Inflation (%)

Consumer Price Index; (YoY change)

Base year 2012

Exports hit the lowest in eight months in June 2019

Exports Imports

Figures in $ million

Industry Blues Continue

IIP growth (%)

(YoY change ); Base Year 2011/12

Macro data source: CMIE

Jun ’18 Dec ’18 Jun ’19 May ’18 Dec ’18 May ’19

10

8

6

4

2

0

Nov ’18 Dec ’18 Jan ’19 Feb ’19 Mar ’19 Apr ’19 May ’19 Jun ’19

43

,^6

51

36

,^2

75

41

,^4

00

40

,^2

90

26

,^0

17

26

,^7

18

26

,^0

69

25

,^0

12

41

,^10

3

42

,^3

45

43

,^4

39

45

,^3

56

26

,^3

43

27

,^8

07

32

,^5

94

30

,^0

09

50.6

Jan-Mar 2018

48.5

Apr-Jun 2019

49.7

Jan-Mar 2019

50.5

Oct-Dec 2018

49.3

Apr-Jun 2018

48.7

Jul-Sep 2018

Sliding Sentiment

Business confidence index has dipped for two consecutive quarters

4.9

2.1

3.2

3.9 3.1

2.5