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Last updated: 25 Apr, 2015  

March Rate Cut Boosts Business Confidence in India

PR Newswire | 24 Apr, 2015
March Rate Cut Boosts Business Confidence in India

MUMBAI, India: The MNI India Business Sentiment Indicator, a gauge of current business conditions among large Indian companies, rose by 1.4% to 63.9 in April, from an 11-month low of 63.0 in March.

The increase in sentiment came after the RBI's March interest rate cut and was led by increased confidence among manufacturing and construction companies.

Aside from overall business sentiment, key activity metrics including Production, New Orders and Productive Capacity all pointed to an improvement at the start of India's financial new year.

The Production Indicator rose for the first time in five months to 62.6 in April, slightly above the outturn of 62.0 in the same month a year earlier. New Orders, a key signal of business demand rose to 61.4 in April from 59.2 in March, the highest since November 2014. On the downside, Export Orders remained relatively weaker, held back by the stronger rupee.

The recent central bank rate cuts have started to come through with businesses reporting both a lower cost and greater availability of credit. The Interest Rates Paid Indicator fell to 43.6 in April, the lowest on record while credit availability picked up to the highest since January. Firms were the most optimistic about the financial position since December 2014.

The long trend decline in inflationary pressures appears to have come to an end. Input Prices increased for the second consecutive month and firms reported an increase in the prices they charged to the highest since November.

Commenting on the latest survey, Chief Economist of MNI Indicators Philip Uglow said, "There was a welcome improvement in business sentiment in April, accompanied by a pick-up in output and orders. This may mark a turning point following the downturn since the end of last year, as companies take advantage of the easier credit conditions."

"While there probably remains a little further room for the RBI to cut interest rates, a pick-up in inflationary pressures, following a sustained downturn, suggests that most of the good news on inflation is now behind us."

For further information, please contact:

Naomi Pickens

Public Relations


Editorial Content:

Philip Uglow

Chief Economist, MNI Indicators

Notes to Editors

Please source all information to MNI Indicators.

MNI India Business Sentiment is a monthly poll of Indian business executives at companies listed on BSE (formerly known as the Bombay Stock Exchange). Companies are a mix of manufacturing, service, construction and agricultural firms.

Respondents are asked their opinion on whether a particular business activity has increased, decreased or remained the same compared with the previous month as well as their expectations for three months ahead, e.g. is Production higher/same/lower compared with a month ago?

Diffusion indicators are then calculated by adding the percentage share of positive responses to half the percentage of those respondents reporting no change. An indicator reading above 50 shows expansion, below 50 indicates contraction and a result of 50 means no change.

Data is collected via telephone interviews. More than 400 companies are surveyed each month. The survey has been in place since November 2012.

About MNI Indicators

MNI Indicators, part of Deutsche Börse Group, offers unique macro-economic data and insight to businesses and the investment community. We produce data and intelligence that is unbiased, pertinent and responsive. Our data moves markets.

For more information, visit our website at

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