The National Council for Applied Economic Research (NCEAR) and Mastercard Worldwide Index of Business Confidence study reflects weak performance of economic indicators, mirroring current slowdown conditions.
The study revealed that the Business Confidence Index (BCI) shows a decline by 6.2 percentage points over the previous quarter.
The study also said that the last quarter of the financial year 2011-12 showed considerable recovery in the BCI after registering five continuous decline, thereby reflecting a change in the business environment in the country.
However, weak performance of various leading economic indicators has dampened the business sentiments in the present round of the survey which registered a drop to 126.6 points from 134.9 points in April 2012, the study said.
The study also points out that although the present index value is comparatively lower than the last quarter, it continues to be higher than the BCI recorded in October 2011 and January 2012.
The study was based on a quarterly survey that includes the overall economic conditions, financial position of firms six months from now, investment climate and level of current capacity utilisation.
Shashanka Bhide, Senior Research Counselor, NCAER, said that there were both external and domestic factors causing decline in business optimism.