Indicating signs of improvement, think-tank National Council of Applied Economic Research (NCAER) has said its Business Confidence Index (BCI) rose 41.1 per cent in the July-September 2020 period. This assumes significance as the GDP slipped by a historic 23.9 per cent in the April-June 2020 quarter, on account of the lockdown imposed by the government to check the spread of coronavirus.
It stated that after declining for two consecutive quarters (Q4:2019-20 and Q1:2020-21) and falling to its lowest ever of 46.4 in Q1:2020-21 (Round 113), the NCAER Business Confidence Index increased to 65.5 in Q2:2020-21 (Round 114), a quarter-on-quarter (q-o-q) increase of 41.1 per cent. However, on a year-on-year (y-o-y) basis, BCI for the second quarter of 2020-21 was lower by 36.5 per cent compared with a year ago and remained lower than the BCI in the fourth quarter of 2019-20.
It said round 114 of the NCAER BES, therefore, suggests that although business sentiment is recovering from its lowest-ever level in Q1:2020-21, it continues to remain subdued. The 114th round of the NCAER Business Expectations Survey (BES) in September 2020 came as the country entered the fourth phase of unlocking of the economy. The BCI is an indicator of business sentiment across the Indian industry.