Business sentiment in India eases in November; still buoyant: Report

NEW DELHI: Business sentiment in India fell marginally in November but remained at a relatively higher level indicating the overall buoyant outlook, says a report.

According to the MNI India Business Indicator, calculated from the responses of more than 400 BSE-listed companies, the decline in November business sentiment was largely a result of new orders and also because backlogs fell following the end of the festive season.

The MNI India Business Indicator declined by 1.1 per cent to 68.9 in November from 69.7 in October.

"Business sentiment fell a little in November but remains at a relatively high level. While Indian businesses generally have a positive outlook, we are yet to see a significant pick up in output or orders," Chief Economist of MNI Indicators Philip Uglow said.

Notwithstanding the fact that business confidence eased for the second consecutive month to the lowest since August, it is 6.7 per cent above the level seen a year ago, indicating that sentiment remained buoyant.

"The global drop in oil prices has come at a good time for India and will help to boost growth as well as cap inflation. Monetary policy looks set to remain on hold over the short-term but a slightly lower profile for inflation over 2015 should enable the RBI to reduce official interest rates before the second half of next year," Uglow added.

The survey further said that 39 per cent of respondents thought that the policies of Narendra Modi-led government have had a positive impact on their business.

"A significant proportion highlighted the quicker implementation and clearance of business proposals by the government as the primary reason for the improvement," the report said.

Nevertheless, 45.6 per cent of respondents said their business had been unaffected by the government's policies, while just under 2 per cent thought that they have had a negative impact.