According to a Ficci survey released on Monday, the country's business sentiment has been severely hit by the second wave of Coronavirus infections, stressing the need for another fiscal package.

As per the report, the overall business confidence index has plummeted to 51.5 in the current round, down from a decadal high of 74.2 in the previous round.

According to the Ficci’s Business Confidence Survey, corporate India's optimism level has seen a "sharp deterioration" since the previous survey.

"Worsening current conditions, as well as muted expectations about the near-term prospects on the back of a sweeping second wave of Coronavirus infections, pulled down the overall index value by over 20 points,” it said on Monday.

The majority of the participants stated weak demand conditions and increasing raw material costs as a bothering factor in the current survey.

"With household income being severely impacted and past savings are already drawn down during the first wave of infections, demand conditions are expected to remain weak for longer this time around," it added.

The majority of respondents cited weak demand conditions and rising raw material costs as a cause of concern.

"Companies unanimously felt the need for another fiscal package," it noted, focused primarily on addressing the demand side.

The study indicated that demand-boosting measures such as direct income support for the needy in rural and urban areas, income tax reductions for the middle class, and temporary reductions in indirect taxes be explored immediately.

Only 19 per cent of respondents were enthusiastic about better hiring prospects in the following two quarters, according to the report.

The current round's export prospects have also deteriorated significantly, with only 27 per cent of respondents indicating increased outbound shipments.

Only a large vaccination effort, according to participants, could decouple India's economy from another pandemic-induced shock.

A substantial proportion of the participating companies emphasised the difficulty in obtaining credit and urged the banking community to increase lending at a reasonable rate.

"The companies highlighted that the entire process for approval of loans has become extremely time consuming which is severely dampening business prospects," it added.

The survey also called for targeted fiscal support- in the form of tax waiver and financial assistance- to MSME sectors that were previously kept out of the stimulus package but were deeply impacted by it including travel, tourism, hotels and hospitality, and civil aviation.

The government must provide employment-based incentives to employers to avoid job losses, based on the survey, which could include temporary fiscal support for salary payments for employees in the MSME (Micro, Small and Medium Enterprises) sector, as well as exemptions from employers' contributions to PF and ESI for the current fiscal year.

The survey was conducted in April and May and aims to assess the respondents' expectations for the months of April to September.