On 3 November 2026, ASSOCHAM released the latest reading of its new ABC (ASSOCHAM Business Confidence) Index. It stood at 128.72 in October 2026, up 8.1% from 119.05 in October 2025. ASSOCHAM's forecast for November is 128.4, against 118.56 a year earlier, a rise of 8.3%.
The index was launched on 30 September 2026 and combines 22 economic indicators into a single reading. ASSOCHAM President Nirmal Kumar Minda described the latest numbers as reflecting the "continued resilience of India's business environment".
For an MSME owner, the more useful question is not whether confidence is up. It is: if demand picks up next quarter, will your business be able to deliver it profitably?
What is behind the number
We checked the main drivers ASSOCHAM cited against the original data releases.
1. Tax collections are strong. Gross GST collections for October 2026 were ₹2,31,290 crore, up 22.9% from ₹1,88,125 crore a year earlier. Net GST revenue rose 25.6%.
2. Bank credit is growing fast, and getting slightly cheaper. RBI data for September 2026 show non-food bank credit up 19.1% year on year, against 11.2% a year earlier. Credit to industry grew 19.5% and to services 28.3%. The average lending rate on fresh rupee loans eased to 8.51%, from 8.61% in August. (ASSOCHAM cites bank credit growth of 19.9%. That is a broader measure; the non-food figure above is the one RBI uses for business lending.)
3. Business activity is expanding. The HSBC Flash India Composite PMI rose to 56.7 in October, from 55.9 in September. Any reading above 50 means expansion. Services led at 56.2.
Read the data carefully
Three details matter more than the headline:
- Imports drove much of the GST jump. Tax on imports rose 42.2%, while domestic GST grew 15.8%. Domestic collections are the closer signal of what your customers in India are buying. In Gujarat, domestic GST rose 16% to ₹13,516 crore.
- Manufacturing is steady, not accelerating. The flash manufacturing PMI eased slightly, from 55.1 to 54.9. Services carried the October gain.
- The index is new. With only a few monthly readings, it is too early to read trends into small moves. Use it alongside other data, not instead of it.
The most important caution comes from MSMEs themselves. SIDBI's MSME Outlook Survey for July–September 2026, covering about 1,200 firms, found business confidence rising to 60.4. Yet 20–30% of firms reported falling margins, and working capital remained the main pressure point, especially in trading.
In plain words: sentiment is good, but margins and cash are where MSMEs feel the strain.
Where good demand turns into stress
Rising demand is the best problem a business can have, but it exposes weak processes quickly. When orders grow, three things usually break first: cash, capacity and follow-up.
Example. A manufacturer sells ₹5 crore a year, and customers pay in 60 days. At any time, about ₹82 lakh is sitting with customers. Confidence turns into orders and sales grow 20% to ₹6 crore. Payment terms stay exactly the same: 60 days. Money sitting with customers now rises to about ₹99 lakh, so the business must find roughly ₹16 lakh more in working capital, plus extra raw material and wages, months before the extra sales turn into profit. At a 10% net margin, the additional ₹1 crore of sales earns about ₹10 lakh in a full year, less than the cash it locks up.
That is how a good year can turn into a cash crunch. Growth uses cash before it earns it. Nothing went wrong with the customers. Growth was not the problem. The lack of a plan for the cash it needs was.
Policy is moving in MSMEs' favour
Two recent changes are worth knowing:
- MSMED (Amendment) Act, 2026. Passed by Parliament in August 2026 and published on 13 August, it strengthens recovery of delayed payments for micro and small suppliers: online dispute resolution, time-bound mediation (90 days), settlement of central public sector invoices through TReDS, and, where a buyer challenges an award for more than six months, a court-ordered payment of at least 50% to the supplier. Its provisions take effect on dates the Central Government notifies, so check which parts are in force.
- Lighter compliance penalties. As reported alongside the index, the GST penalty has been cut from ₹25,000 to ₹10,000, the prosecution threshold raised from ₹1 crore to ₹5 crore, and minor offences decriminalised under the Jan Vishwas framework.
These protections only help if your paperwork is in order: a valid Udyam registration, clear payment terms in every purchase order, and invoices that state them.
Five things to do this quarter
✅ Your checklist for this quarter
- Check margin per order, not just sales. List your last 20 orders with the actual cost of material, labour and delivery. With 20–30% of MSMEs reporting lower margins, find out which customers and products are really paying you.
- Put payment terms in writing, every time. Mention your Udyam number and agreed credit days on quotations, POs and invoices. Under the MSMED Act, buyers must pay micro and small suppliers within the agreed period, and never more than 45 days.
- Arrange working capital before you need it. Fresh lending rates are easing. Speak to your bank about limits now, not when a large order arrives. Register on a TReDS platform if you sell to large buyers.
- Find the step that will break first. Walk your floor or your office and ask: if orders rise 20%, where will work pile up? Fix that one constraint before adding capacity everywhere else.
- Track every enquiry to a close. When demand rises, enquiries are lost in WhatsApp and email. Keep one list with an owner, next step and date for each enquiry, and review it every week.
The bottom line
Confidence is a signal, not a result. The numbers say the opportunity is there. Whether it shows up as profit depends on pricing, cash and delivery discipline: the unglamorous work of execution.
Procuris helps MSMEs and growing firms turn opportunity into execution: business development, project systems and practical advisory. If you want to review where your business would strain first, let's connect.
Sources
- ASSOCHAM ABC Index release, reported by IANS / Social News XYZ, 3 Nov 2026: https://www.socialnews.xyz/2026/11/03/business-confidence-in-india-continues-to-remain-resilient-assocham-index/
- GST collections, October 2026 (provisional), TaxGuru: https://taxguru.in/goods-and-service-tax/gst-collections-october-2026-rise-22-9-percent-rs-2-31-lakh-crore.html
- RBI sectoral credit and lending rates, September 2026, News On AIR, 30 Oct 2026: https://newsonair.gov.in/bank-credit-and-interest-rate-trends-for-september-show-significant-movements-rbi/
- HSBC Flash India PMI, October 2026: https://www.sahi.com/news/india-hsbc-composite-pmi-rises-to-56-7-in-october-as-services-activity-accelerates
- SIDBI MSME Outlook Survey, Jul–Sep 2026, KNN India, 24 Oct 2026: https://knnindia.co.in/news/newsdetails/msme/indias-msme-business-confidence-improves-expectations-index-signals-further-gains-sidbi
- MSMED (Amendment) Act, 2026 explained, Mercurius & Associates: https://masllp.com/msmed-amendment-act-2026-new-msme-delayed-payment-rules-explained-simply
The worked example uses illustrative numbers. This article is general information, not financial or legal advice.