CriSidEx: India’s first MSE Sentiment Index

February 9, 2018 Finance Talk Valli Sarvani No comments

India’s first sentimental index for micro and small enterprises (MSEs), CriSidEx was launched by Finance Minister Arun Jaitley.

It was jointly developed by CRISIL and SIDBI, hence the name CriSidEx.

The existing business indices do not show impact of each industry or sector at micro level. Moreover, they are predicting the direction of annual change of GDP.

MSEs cannot take important decisions due to lack of sector-specific index. That’s why CriSidEx was launched.

CriSidEx is intended to help indicate the present state and prospective outlook on the MSE sector each quarter.

CriSidEx is calculated for every three months i.e. for every quarter.

There are two indices in CriSidEx, one for ‘survey quarter’ and another for ‘next quarter’. It would provide independent time series data after few rounds of survey.

CriSidEx is based on diffusion index of 8 parameters. These parameters measure the MSE business sentiment on a scale of 0 to 200. 0 indicates extremely negative condition and 200 means extremely positive.

1,100 MSEs were surveyed between November and December to arrive at the parametric feedback.

The first reading of CriSidEx for the quarter of October-December 2017 i.e. the survey quarter indicates mildly positive sentiment as it stood at 107. And for the period of January-March 2018, i.e. the next quarter, it is likely to be more positive.

CriSidEx is expected to capture the sentiments of MSE in a good manner and also play a crucial role in addressing the existing financial and developmental gaps in the ecosystem of MSE. It is also expected to fill the current lags that restrict lenders from taking timely credit decisions by providing financial information of MSEs.

The readings of CriSidEx will help indicate big potential changes in production cycles. As a result, it will improve market efficiencies.

It will also capture the sentiment of exporters and importer, and provide actionable indicators on foreign trade.

Image Credit: Deccan Herald / CC BY 2.0