India has slipped in the business optimism index to the 7th position in the September quarter, from the second slot in the previous three months, showing clear signs of lag in the economy, says a survey.
Indonesia is at the top, followed by Finland (2nd), the Netherlands (3rd), Philippines (4th), Austria (5th) and Nigeria (6th), as per Grant Thornton’s International Business Report (IBR).
According to the quarterly global survey on business optimism, Indian businesses have expressed low confidence over revenue expectations in the next 12 months.
They also saw a drastic fall in confidence for profitability with 54% showing optimism as against 69% in the last quarter.
Other parameters like expectations of an increase in selling prices and exports have also suffered a slight fall in optimism in this quarter, the survey said.
There were clear signs of lag in the economy which caused the drop in ratings, Grant Thornton India LLP Partner India leadership team Harish HV said.
Indian businesses, however, remained optimistic about an increase in employment as 54% respondents expressed the need to increase hiring in the next 12 months, a three-point rise from June quarter.
Other areas where the optimism remained intact were the investment in plant and machinery and research and development (R&D).
According to IBR, India tops the chart in citing regulations and red tape and lack of ICT infrastructure as the biggest growth constraints with 69% and 46% voting for it respectively.
Indian businesses also identified a shortage of finance and lack of skilled workforce as pain points of India Inc taking the 2nd and the 3rd spot respectively.
Globally, the overall position for business optimism remains relatively high at 49% in the September quarter. This is down 2 pps on the June quarter and follows five consecutive quarterly increases in business sentiment.
The IBR provides insight into the views and expectations of more than 10,000 businesses per year across 36 economies.