The Confederation of Indian Industry (CII)-Indian Banks’ Association (IBA) Financial Conditions Index, a key indicator in assessing short-term financial conditions in the Indian economy, for the ongoing fourth quarter of 2017-18 registered 53.2, an improvement of five points year-on-year.
However, it marked a significant fall of 12.1 over the third quarter of this fiscal. There has been also been a major compression in two sub-indices — the Cost of Funds Index (22.8 in Q4 FY’18 versus 55.6 in Q3 FY’18) and Funding Liquidity Index (60.3 in Q4 versus 85.9 in Q3).
Two other sub-indices, viz. the External Financial Linkages Index (67.2 in Q4 versus 64.5 in Q3) and Economic Activity Index (62.5 in Q4 versus 55.2 in Q3) have shown an improvement in the Q4 FY2017-18 quarter vis-à -vis the last quarter.
‘Industrial activity’
“Industrial activity and consequent linkages to financial sector are contingent on intervention in fiscal, sectoral and monetary policy space,” said Chandrajit Banerjee, director general, CII.
“There is a clear acknowledgement of actions that have been taken by the government in fiscal and sectoral space,” the director general said.
