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EDITIONS
Tuesday, 6 November, 2001, 10:48 GMT
Indian business confidence fades
Fog shrouding Delhi's Rajpath Road
India's economy is looking at a murky future following 11 September
India's normally optimistic businesspeople are finding confidence sagging as a result of the slowdown which followed the 11 September attacks on the US.

According to a new report by the influential National Council of Applied Economic Research, the main indicator of business confidence has fallen to a two-year low.

Its survey was compiled from 1,300 responses emanating from across Indian business to four questions, covering the investment climate, firms' finances, capacity utilisation and the general economic situation.

The drivers for the fall of 11% in the last three months are sluggish domestic demand, financial constraints on business and stiff competition from imports, the NCAER said.

Sliding growth

Some respondents said they hoped the upcoming festival season, which takes place in November, could trigger an uptick in the market for consumer goods such as washing machines and televisions.

But in the meantime, inventories are rising and investment plans are on hold, despite the stimulus from interest rate cuts and government incentives to exporters.

Little improvement is expected for at least six months, the report said.

And economic growth overall is on the way down, with the first three months of the financial year showing gross domestic product expanding by 4.4% year on year, down from 5.2% registered overall in the previous financial year.

See also:

26 Oct 01 | Business
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