India Inc's business optimism index remained stable for the April-June quarter of this year, thanks to a rate cut by the RBI and Government's recent policy reforms, a D&B report says.
The Dun & Bradstreet Composite Business Optimism Index stands at 81.1 during the second quarter of 2016, an increase of 1.1 per cent as compared to April-June period of 2015.
"The recovery in business confidence that started from the first quarter of 2016 has remained intact during the second quarter of as well. This signifies the stabilising business sentiment prevalent in the economy," Dun & Bradstreet India President & Managing Director Kaushal Sampat said.
Sampat said, the factors that seem to have boosted the confidence levels of corporate India include, delivering a Budget that adheres to the fiscal consolidation roadmap and the fact that stalled projects were at a 30-quarter low in December 2015.
Going forward, it is the progress of the monsoon that will play a crucial role in shaping business sentiment.
"The possible acceleration on the labour reform front through the introduction of new labour bills, the bankruptcy code and amendments to the SARFAESI Act during the second half of the Budget session also hold promise to boost business confidence," he added.
For calculating the composite BOI, each of the six parameters - net sales, net profits, selling prices, new orders, inventories and employee levels - is assigned a weight. The parameter weights are then applied to these ratios and the results aggregated to arrive at the Composite Business Optimism Index.
In another survey, Assocham said a large part of India Inc is getting increasingly optimistic about performance of the economy in the coming six months.
As many as 57.1 per cent of the respondents shared a sense of optimism about the economy for the coming months.
"Since the industry has been operating much below its capacity for a long period, there would still be a lag for fresh investment while a pick-up in increased employment would still be away," it said.
However, majority still feel that the present state of economy and its undercurrent have not changed much as compared to the previous six months.
"This is true in the case of profitability at the industry and firm level," it said adding since there has not been much improvement in the employment situation, the wage costs for the industry have remained stagnant.
"The majority of the industry opines that in the January to March quarter, there has been no change in terms of the expenditure incurred on wages," it said.
Assocham has however not mentioned the survey size.
Due to the current subdued demand in January to March quarter, 76.2 per cent of industry feels that there is no change in terms of the expenditure incurred on electricity and fuel cost.