India has slipped to the 7th position this quarter in business optimism ranking in Grant Thornton’s International Business Report (IBR) survey. Last quarter, India was ranked second in the survey.
The survey was conducted in September before the government had announced its major reforms like bank recapitalization and infrastructure investments among others. The sample size of the survey is 2,500 businesses spread across 37 economies.
India has also slipped from its 1st position last quarter to 8th position this time in terms of revenue expectations. Businesses have expressed low confidence over expected revenue in the next twelve months with 75 percent respondents hoping for an increase in the revenue.
In terms of profitability, confidence has dropped with only 54 percent respondents showing optimism as against 69 percent in the last quarter.
Besides these, slight fall was also visible in expectation for an increase in selling prices and exports. The confidence for selling prices to increase has dropped to 5th position from the 4th, with only 47 percent businesses showing optimism. The optimism for exports to increase has dropped to 8th from the 6th, with only 31 percent confident about the increase in exports.
The survey said that India’s biggest growth constraints are citing regulations, red tape and lack of Information and communication technology (ICT) infrastructure. For Indian businesses shortage of finance and lack of skilled labour are the major disadvantages.