In a survey conducted by the industry organization, Confederation of Indian Industries (CII), corporate India’s confidence is witnessing a steady climb in the first half of the current fiscal. This is happening in spite of serious worries of inflation and slow emergence of world economies from global recession.
The 73rd Business Outlook survey pegs the business confidence index (BCI) for the period April-September 2010 at 67.6, an increase of 1.5 points from the March 2010-ending half year. However, this rise is moderate when compared to the amazing 7.4 point increase during the previous survey.
Chandrajit Banerjee, director general, CII said, “The improvement in the index reflects better prospects for the economy in the coming six months. Although the increase is moderate, it is important to note that it is on a high base of the previous survey.”
The survey is based on a representative sample of 458 companies across India. The survey discloses that almost three-fourth of companies are planning to raise their investments in the next six months and two-thirds displayed confidence that export will increase in the same period. It also reveals that business prospect for the services sector, particularly outsourcing firms, is comparatively higher than overall business outlook.
59% of survey respondents expect to see above-75% capacity utilization in the half year compared to 44% in the previous survey. The survey also uncovered the fact the capacity utilization is more for bigger companies.
While 80% respondents expect new orders in the current half year, only 60% had similar expectations during the previous survey.
The survey results gain importance in the backdrop of unprecedented inflationary conditions and global economic instability. Rising interest rates and infrastructural and institutional shortages is only managing to make matters worse.
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