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Business outlook and consumer confidence in the country have improved during the second quarter of the current financial year compared to the year-ago period.
However, there is reduced optimism on the finance and exports front, according to the Industrial Outlook Survey, July-September 2014 released by the Reserve Bank of India on Tuesday.
The survey, the first after the formation of the new Government at the Centre, showed increased optimism in percentage points ranging from less than 100 basis points to 300 basis points in production, order books, capacity utilisation and employment, among others.
For instance, the selling price expectations had improved from 12.5 to 13.3, while optimism on profit margins turned positive from -2.3 to one.
“The business outlook of the Indian manufacturing sector as inferred from movements in the Business Expectations Index (BEI) showed improvement for the second quarter at 106.2 (105.2),’’ RBI said.
The increase in the composite index was due to higher optimism in capacity utilisation, imports, production and cost of raw materials, it added.
But things appear to be not moving well in the key areas of finance and exports as expectations showed reduced optimism on availability of finance, and exports which came down to 19.7 per cent from 20.6 per cent.
The survey was based on the response elicited from 1,225 manufacturing companies.
The consumer confidence survey also echoed a similar sentiment. There was an improvement in consumer confidence as measured by the Current Situation Index (CSI) which rose by 4.6 percentage points over the previous quarter.
This was due to improvement in positive perception on all parameters except prices, the RBI said. Interestingly, there seems to be no great expectations about the future as the Future Expectations Index remained at the same level as in the last round of the survey.
The survey was based on responses received from 5,200 selected individuals/households spread across six cities — Bangalore, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi.
India's monsoon season this year wound up 12% below normal, its worst in five years, leaving behind less planted area and depleted reservoirs that would lower Kharif, or summer, harvest and impact winter crops.
Rainfall in the past week was 37% short of normal, bringing an end to a season that began with the driest June, data from the India Meteorological Department (IMD) showed.
"The seasonal monsoon deficit this year is 12%. Post June the rains were spread and there was no long dry spells which could impact agriculture and reservoir position," said Laxman Singh Rathore, director general, IMD
It was the driest monsoon season since 2009 when rainfall deficit at 22% was the worst since 1972 and the country had to depend on global markets for its foodgrains.
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