The downturn in (as against December quarter) sentiments about the macro economy is a matter of concern, said Bornali Bhandari, Fellow, NCAER.
Business sentiment fell sharply in the March quarter due to concerns over investment climate amid "patchy" and "uneven growth", said a survey.
"The 92nd round of Business Expectations Survey (BES) carried out in March 2015 reveals that business sentiment has fallen sharply. The BCI decreased by 6.9% over the previous quarter," said a survey by economic think tank National Council of Applied Economic Research (NCAER).
All components of BCI (Business Confidence Index) declined between January and April, NCAER said.
The downturn in (as against December quarter) sentiments about the macro economy is a matter of concern, said Bornali Bhandari, Fellow, NCAER.
"Declining sentiments about the investment climate is worrisome in the background of a patchy and uneven growth in 2014-15 and does not foretell improvement investment scenario in 2015-16," Bhandari said.
As per the survey, all sectors, barring consumer durables, registered a drop in BCI over the last quarter, with services showing the largest fall (13.6%), followed by capital goods at 13.1%.
The consumer durables sector registered a marginal rise of 0.8% over the previous quarter.
The survey further said the disaggregation of responses by firm size also exhibits pervasive gloomy sentiments.
The BCI of Rs 100 to 500 crore firms declined the most, 9.2%, followed by less than Rs 1 crore firms whose BCI declined by 8.6%.
"The only group that showed a marginal increase...is the Rs 10 to 100 crore firms, whose BCI increased 0.4 per cent," the survey said.
Sentiments regarding production, domestic sales, exports, imports of raw materials and pre-tax profits are mixed, it said.
While sentiment regarding sales and exports was subdued -- with larger firms not expecting an increase in either -- sentiments regarding production was discouraging, it said.
The survey further said that trend of a continuous rise in the Political Confidence Index (PCI) was reversed in April when PCI fell 8.9% over the last quarter.
Components of PCI showed mixed results, with only two improving, while six deteriorating.
NCAER, Business Expectations Survey (BES), tracks business sentiment of over 500 Indian companies.
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