According to the National Council of Applied Economics Research’s (NCAR) Business Confidence Index (BCI), in the first quarter of this fiscal since 1991, the business sentiment across the Indian industry felt to its lowest limit. A release on Friday said that the BCI stood at 46.4 points over the last quarter as it faces a massive decline of 62% from the year-ago level.
From the previous quarter, it saw a decline of 30.4% than the index fell over 40.1% in the last quarter of FY-20. By the survey of the National Council of Applied Economic Research (NCAER), in July 2020 quarter on a year-on-year basis, it fell to 62 percent. In the history of 113 rounds of NCAER Business Expectations Survey (BES), this is the lowest that BCI has ever fallen, on Friday the think-tank sales. Since 1991 by NCAR the BES was carried quarterly. When the country had started opening up slowly after more than two years of lockdown due to the COVID-19 pandemic following which the spread of disease accelerated the 113th round of BES was carried out in June 2020. It was expected by the proportion of respondents that the overall economic conditions will improve in the next six months and between the 4th quarter of FY20 and the 1st quarter of FY21 it fell 9% points from 26.1% to 17.1%.
On the business expectation survey in which the BCI formed a part, found substantial regional variations in business sentiment. While in the case of North India BCI increased by 25.1% over the quarter. For East and West India, it fell by 89.3% and 68.1% respectively. NCAER said that in July in the case of South India the figure was -53.9%. But during March and April owing to the difficulties in data collection this is not a representative sample for a quarter. It also found dismal trends across categories. While over quarter 4 of FY20 firms reported a 6.7% decline in the employment of unskilled labor. During quarter 1 of the ongoing fiscal, the figure jumped to 46%.
For the June quarter of FY21, the figure for skilled labor stood at 18.2% compared to the previous quarter of 4.3%. Over the next six months, 77 of the firms expected no change in managerial or skilled labor employment which suggests that labor markets would be subdued in the future similarly. The figure for the unskilled labor stood at 58%. From six cities which include Mumbai, Pune, Delhi NCR, Kolkata, Bengaluru, and Chennai the quarterly BES surveys 600 companies.
