Lingering effects led to optimism dip

Mumbai: India Inc’s business optimism for the current quarter saw a decline due to the lingering impact of demonetisation and GST that has caused a temporary disruption in economic activities.

The Dun & Bradstreet business optimism index fell 4.1 per cent to 76.7 for the December quarter when compared to the same period last year.

However, the sentiments improved on a sequential basis amidst a recovery in few macro-economic indicators as well as the measures announced by the GST council to ease the difficulties faced by small corporates.   

Based on the feedback received, it was observed that four out of the six optimism indices declined as compared to same quarter last year.

Around 71 per cent of the respondents expect volume of sales to increase in Q4 2017 compared to around 79 per cent in Q4 2016, a decrease of 8 percentage points.

Similarly, only 26 per cent of the respondents expect an increase in net profits, compared to 35 per cent in Q4, 2016, a decrease of 9 percentage points.

According to it, the proactive steps to alleviate some of the challenges, and at the same time indicating its intent to continue to solve more such issues has to an extent softened the distresses caused by GST.

“The supply disruptions arising from GST rollout is also anticipated to reverse gradually as the companies adapt to the new system after enduring the initial glitches,” said Manish Sinha, MD, India, D&B.