Dip in Business Confidence Index, Political Confidence Index: NCAER

New Delhi, May 6 (UNI) The NCAER Business Confidence Index for March, 2007 shows a rather steep fall of 3.8 per cent over the previous quarter -- be it in terms of firms size, investment plans, demand conditions or corporate performance.

The four main components of the BCI (Business Confidence Index) also reflect a Southward movement. These are an assessment of the overall economic conditions, investment climate, financial position of the firms and the capacity utilisation.

The Political Confidence Index -- another construct of the NCAER -- also shows a movement in the same direction as the BCI. All the sectors of the industry express lower political confidence.

Nevertheless, there is a variation depending upon the regions.

For instance, a larger proportion of the sample firms from the western and northern regions expressed greater confidence in the political management of the economy in the current round than in the previous round of the survey.

The BCI of very small-sized firms with a turnover less than Rs one crore has come down by 6.3 points over the last round. While the BCI of the firms ranging between Rs 1-10 crore has seen a fall of 3.8 points, between Rs 10-100 crore 7.0 points, between Rs 100-500 crore 7.9 points and above Rs 500 crore 6.7 points.

Therefore, the data shows that the BCI of the firms has dipped regardless whether they are small or big.

The only instances of improved confidence over the earlier round occurred in the case of 'improved financial performance expectations' for the next six months.

As compared to the last round, the BCI for public limited firms also declined by 7.4 points. The BCI for the third category -- private limited firms -- showed a fall of 2.5 percentage points.

UNI