India Inc's Business Confidence Rises Dramatically According to CII Business Survey
In a positive development for the Indian economy, the CII Business Confidence Index reached a two-quarter high of 68.2 in the second quarter of FY25. This uptick in private investment is seen as critical in supporting public capex, which had slowed down in the first quarter due to elections but has shown signs of improvement recently.
The surge in the index reflects the industry's buoyant outlook on India's economic prospects. The 128th round of the CII Business Outlook Survey, which covered over 200 firms from various sectors and regions, painted a picture of cautious optimism. Businesses are confident about India's domestic growth trajectory but aware of potential global headwinds.
The economic momentum in India has been steady despite global uncertainties. Geopolitical tensions, rising global commodity prices, and slowing external demand are top worries for businesses. However, the upcoming festive season may strengthen growth prospects.
The positive hiring sentiments across sectors indicate a broader economic recovery in India. Almost half of the respondents expect an improvement in hiring within their companies during the second quarter of FY25. Over 59% of survey respondents anticipate a rise in private capital expenditure (capex) in the first half of FY25 compared to the second half of FY24. More than half of the respondents expect an increase in sales and new orders during the July-September quarter.
Capacity utilisation above 75% is a strong indicator for potential fresh investments, as suggested by the Reserve Bank of India (RBI). The survey's findings highlight a resilient business environment that continues to adapt and grow amidst both opportunities and challenges.
CII has cautioned that uncertainties in the global landscape remain and need to be monitored closely. Policy continuity contributed to a more optimistic business environment in India. The general elections provided a boost to economic activity in India.
It is important to note that the specific names of the 200 companies surveyed in the 128th round of the CII Business Outlook Survey in September 2024 are not publicly disclosed. However, the index was higher compared to the previous quarter (67.3) and the corresponding quarter of last year (67.1).
In conclusion, the Indian economy continues to show resilience and potential for growth, despite global uncertainties. The positive results of the CII Business Outlook Survey indicate a recovery in private investment and hiring, and a generally optimistic business environment. The upcoming festive season may further strengthen these growth prospects.
