Business confidence in India has slipped to a one-year low due to the demonetization drive introduced by Prime Minister Narendra Modi in November, according to a survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI).
The survey, conducted between December 2016 and January 2017, showed the country's Overall Business Confidence Index (OBCI) slipped to 58.2, compared to a figure of 67.3 for the same period last year. The survey drew responses from 207 companies and aimed to capture the assessment of the current situation, as well as gauge expectations regarding performance for the first half of this year.
"The sharp dip in current condition index can be attributed to the sudden spur of uncertainty created by the government's move to demonetize high value currency notes," the survey said. "Cash dependent sectors especially in the informal economy have been affected. The government has been working to minimize the impact of demonetization and the economy is on the path of normalization."