NCAER's business confidence index rises 90% in Q2

New Delhi: Indicating signs of improvement, think-tank NCAER on Tuesday said its Business Confidence Index (BCI) increased by 90 per cent in the July-September this financial year over the first quarter.

After the second Covid-19 wave, business sentiments recovered in the second quarter of 2021-22, compared to those prevailing in the preceding three months, NCAER said in a release. The BCI increased by 90 per cent on a quarter-on-quarter (q-o-q) basis and by about 80 per cent on a year-on-year (y-o-y) basis, it added.

"The BCI is also higher than what it was in 2019-20:Q2, signalling an improvement in sentiments over the pre-pandemic period," it said.

National Council of Applied Economic Research (NCAER) carried out its 118thRound of its Business Expectations Survey (BES) in September 2021. It has been carrying out the BES on a quarterly basis since 1991, covering 500 firms across four regions. "The current BES survey points to a recovery in business sentiments post the second wave of the pandemic. The recovery is broad-based across firm size, ownership, and industrial sectors," Poonam Gupta, Director-General, NCAER, said. Barring the West zone, business sentiments have improved for all the regions.

The BCI decreased in the West by nearly 10 per cent in 2021–22:Q2, whereas it increased in the East (Kolkata), North (National Capital Region of Delhi), and South (Chennai and Bengaluru), the think-tank said. NCAER said the upward movement in BCI was driven by an improvement in sentiments for all the four components of the BCI -- overall economic conditions will improve in the next six months; the financial position of firms will improve in the next six months; present investment climate is positive as compared to six months ago and present capacity utilisation is close to or above the optimal level.