NEW DELHI: The business confidence in last quarter of 2013-14 improved further on expectations of a new electoral mandate that influenced the overall sentiments economic think-tank NCAER said today.
The BCI in March quarter rose by about 3.8 per cent from the previous quarter to 127 points NCAER data showed.
“The expectations of a new electoral mandate may have influenced the overall sentiments besides some macroeconomic and sectoral level improvements in the recent quarter” National Council of Applied Economic Research (NCAER) said in a release.
The latest round of the quarterly business expectations survey carried out in March 2014 reflects a second successive improvement in business sentiments.
However upturn in growth remained elusive there was a positive news on moderating inflation rate lower current account deficit rupee rate and stock prices it said.
The improvement was not uniform it said three-fourth components of BCI showed a higher level of optimism.
“While expectations of improved financial position is the main factor behind the increase in overall confidence the lower ratings on investment climate remain the area of concern in the present survey.”
In line with the BCI the Political Confidence Index ( PCI) also showed improvement in the present round of the survey from 112.9 points in January 2014 to 136.6 points in April 2014 it said.
The survey was based on a sample of 495 respondents which was conducted ahead of the Lok Sabha election in April.
Think-tank National Council of Applied Economic Research (NCAER) has projected a 5.1-5.5 per cent economic growth in 2014-15 for India.
It also forecast a 6.1 per cent inflation based on wholesale prices in the current fiscal.
The fiscal deficit is estimated at 4.5 per cent of GDP.
“GDP growth rate for 2014-15 is projected at 5.1-5.5 per cent. The higher growth of 5.5 per cent is conditional on pick-up on investment spending” NCAER said in a report today.
It said the agriculture sector may show a higher growth of 4.6 per cent in 2013-14 while the growth in 2014-15 will depend on actual pattern of monsoon.
On the price situation the think-tank said said the overall scenario showed a significant improvement in the last quarter of FY 2014.
“Seasonal correction of food prices policy tightening by the RBI and favorable global factors are some of the attributing factors that may prove transient.
“Food inflation will depend on the spatial and temporal distribution of monsoon in the coming season and the extent to which both are affected by El Nino” NCAER said in a report titled ‘Quarterly Review of the Economy’.
Timing and magnitude of revision in administered prices mainly of electricity and coal will also affect the trajectory of inflation in 2014-15 it added.
Not all of the Indian middle class has access to all amenities yet. According to latest data from National Council for Applied Economic Research (NCAER) only 40 per cent of those in the middle class comprising households with annual income above Rs. 88800 annually (an estimate suggested by NCAER researchers) have piped water connections and only 15 per cent get three hours of water supply every day. Just over half of such families have flush toilets and a similar percentage get 18 hours of electricity in a day.
Non-agricultural labour is still the most common job for men in families earning between Rs. 88801 to 1.5 lakh per year. For the richest 20 per cent population (above Rs. 1.5 lakh per year) however salaried work becomes the most common occupation.
By standard international definitions like a consumption expenditure of more than $10 per day India would have no middle class because everyone spending that much is in the top 5 per cent population of the country. Economist Nancy Birdsall founding president of Washington-based Centre for Global Development proposed a $4-$10 range for a class she described as the “catalysing class” which in India is made up of 150 million people or 12 per cent of the population.
“I think it’s more useful to go beyond the income data and look at what we really mean when we talk about a global middle class” said Dr. Sonalde Desai senior fellow at the NCAER and professor of sociology at the University of Maryland. “This would means things like a college degree fluency in English white-collar jobs among others” she said.
The NCAER data shows that just 12 per cent of adult men in 2011-12 had a degree or diploma only 8 per cent could speak fluent English and 14 per cent had some computer skills. Women had fewer skills than men in each of these categories.
