Variety in Business Outlook: Significant Rise in Confidence Among Indian Corporations (Regarding) CII Business Confidence Survey
India's Business Environment Shows Resilience and Optimism
The latest findings from the CII Business Outlook Survey, conducted in September 2024, suggest a robust and resilient business environment in India. The survey, which covered over 200 firms from various sectors and regions, indicates a positive outlook for the second half of the financial year 2024-25 (FY25).
The surge in the CII Business Confidence Index, which reached a two-quarter high of 68.2 in the second quarter of FY25, reflects the industry's buoyant outlook on India's economic prospects. 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 results of the survey paint a picture of cautious optimism, with businesses confident about India's domestic growth trajectory but aware of potential global headwinds. Over half of the survey respondents expect an increase in sales and new orders during the July-September quarter, and almost half of them anticipate an improvement in hiring within their companies during the second quarter of FY25.
The positive hiring sentiments across sectors indicate a broader economic recovery in India. In fact, 46% of the survey participants expect their companies to operate between 75-100% capacity, a significant increase compared to the previous quarter. This capacity utilisation above 75% is a strong indicator for potential fresh investments, as suggested by the Reserve Bank of India (RBI).
Moreover, the general elections provided a boost to economic activity in India, contributing to a more optimistic business environment. Policy continuity is a key factor driving optimism within India Inc., as indicated by the rise in the CII Business Confidence Index.
However, the survey also highlights some concerns. Geopolitical tensions, rising global commodity prices, and slowing external demand are top concerns for businesses. CII has cautioned that uncertainties in the global landscape remain and need to be monitored closely.
With the upcoming festive season, improvements in private investment, and robust employment prospects, the outlook for the second half of FY25 appears promising. The survey's findings highlight a resilient business environment that continues to adapt and grow amidst both opportunities and challenges. The positive trends in the survey results suggest that India's economy is on the right track, but it's crucial to remain vigilant and adapt to any changes in the global economic landscape.
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