Indian business optimistic despite poor policy-making: survey

Despite a slowdown in industrial activity, corporate India's optimism for the October-December quarter is at a record high, mainly due to unprecedented foreign capital inflows and strong overseas demand for domestic products, says the latest report from National Council for Applied Economic Research and MasterCard.

According to the NCAER-MasterCard's 'Worldwide index of business confidence' report released on Monday, the business confidence index (BCI) for the third quarter of FY'11 (financial year 2010-11) stood at 162.1 points, compared to 155.9 points in the quarter ended 31 June.

However, it appears that businessmen's confidence in Indian policymakers' ability to steer the economy dipped in the October-December quarter in comparison to the second quarter of FY'11, as per a political confidence index (PCI) in the NCAER- MasterCard report. The PCI fell by 9.9 per cent to 116.2 points in October from 129 in July, 2010.

According to the report, the continued business optimism is mainly attributed to the overall growth in industrial activity despite a slowdown, a clear recovery in export volumes and the improving fortunes of capital markets.

However, the report noted that the high level of inflation remains a concern.

"The latest NCAER-MasterCard Worldwide Index of Business Confidence suggests that business sentiments are mirroring the optimism shown by current economic indicators," MasterCard worldwide (South Asia) general manager T V Seshadri said.