India Inc's business optimism soars amid robust growth: Survey
Despite the uncertainties stemming from global economic and geopolitical conditions, the Indian economy has shown remarkable resilience and strength. Further, the upcoming festive season portends well for fortifying growth prospects further, according to CII Business Outlook Survey which was conducted in September 2024, covering more than 200 firms of varying sizes and across all industry sectors and regions.
The survey pointed out that the CII Business Confidence Index (CII-BCI) rose to a two-quarter high of 68.2 in the second quarter(July-September), of the current fiscal year as compared 67.3(Q1 FY25) in the previous quarter and 67.1 in the corresponding quarter last year (Q2 FY24).
CII-Business Confidence Index (BCI) is calculated as a weighted average of the Current Situation Index (CSI) and the Expectation Index (EI), with greater weight given to EI as compared to CSI. These indices are based on questions pertaining to performance of the economy and the respondents’ sector and firm.
The survey respondents cited factors such as improvement in consumption, especially rural demand, steady progress in monsoon, continued emphasis on reforms and fresh sightings in private investment as the key reasons which will drive growth in the current financial year.
Further, more than half (59 per cent) of the respondents anticipate an improvement in private capex in H1FY25 as compared to H2FY24. This is encouraging as this is likely to provide support to public capex which has shown an uptick recently after a lull in the first quarter due to elections.
The upbeat prediction on private investment is attributable to an improvement in domestic demand. Consequently, most of the respondents (46 per cent) feel that the capacity utilisation levels in their company would range between 75-100 per cent during the quarter ending September 2024. This level is higher than the proportion witnessing such capacity utilisation levels in the previous quarter. Moreover, capacity utilisation between 75-80 per cent is a propitious sign as it helps to fuel fresh investments in the economy as per the RBI.
The upcoming festive season portends well for fortifying growth prospects further. That said, the uncertainty in the global scenario persists, necessitating a careful watch on the evolving economic conditions, said CII, in a press release.
A few niggling business concerns have been highlighted by the respondents in the survey with protracted geopolitical tensions, spike in global commodity prices and slowing external demand being the top three ones.
