After staying on top for two consecutive quarters, India's rank on global business optimism index fell to third position. Sentiments surrounding delay in passage of goods and services tax legislation (GST), unresolved tax disputes and debt-laden public banks weighed down on the concerns of corporate India.
These "collectively impacted the business confidence, affecting the overall business optimism in the country," said the latest Grant Thornton International Business Report (IBR).
The quarterly ranking highlighted that India's employment and profitability expectations too slipped one notch down to second and fourth place in the April-June period.
"This is a clear signal that while there is optimism in the market and great business opportunity in India," Harish HV of Grant Thornton India said, "the issue that is bothering investors is the slow progress on key reforms, simplification of tedious government processes and regulatory uncertainties which is impacting India's ranking."
On corporate India's expectation on revenue growth for the country, 96 percent of the respondents voted positively. India thereby continues to grace the top position in its potential to increase its revenue, said the report.
India Inc also displayed overwhelming optimism on the country's export potential. Thirty five per cent of respondents voted for a rise in outward trade this quarter compared to just 13 per cent in the Jan-March quarter of 2016.
With GST tipped to be passed in the coming monsoon session of Parliament, it could reverse both the confidence and the overall business optimism, said Harish.