CII Business Confidence Index rises to a three-quarter high in Q2 FY24

CII surveyed 200 firms of varying sizes across all industry sectors and regions of the country, for the index. Majority of the respondent firms were from the manufacturing sector and 54% of the respondents belonged to the large and medium size cohort.

Despite persistent global headwinds, India Inc’s business confidence was the highest in three quarters, for the July-September period, due to robust domestic demand and macro fundamentals, as per a survey by India’s largest industry body Confederation of Indian Industry (CII).

The CII Business Confidence Index (CII-BCI) registered at 67.1 in the July-September 2023 quarter as compared to a reading of 66.1 in the April-June quarter and 62.2 in July-September 2022, as per a statement by the body on Sunday.

“The reading reaffirms the sustained positive momentum seen in host of high frequency indicators such as GST collection, air & rail passenger traffic, PMIs, among others in the second quarter,” CII said.

The buoyancy seen in rural demand in the recent period, too, was mirrored by the results of the survey which established that nearly half of the respondents (52 per cent) anticipate an improvement in rural demand in the first half of the current fiscal, it stated.

CII surveyed 200 firms of varying sizes across all industry sectors and regions of the country, for the index. Majority of the respondent firms were from the manufacturing sector and 54 per cent of the respondents belonged to the large and medium size cohort.

“The improvement in CII Business Confidence Index to a three-quarter high in the second quarter of FY24 is encouraging and reiterates the on-ground experience of most of the industry players. The expectation of an improvement in rural demand is reassuring and is much required for the inclusive growth of the economy”, said Chandrajit Banerjee, Director General, CII.

Majority of the respondents (66 per cent) felt that the Indian economy will grow in the range of 6-7 per cent in FY24, broadly in line with the forecast of Reserve Bank of India and other multilateral agencies. On interest rates, more than half of the respondents (58 per cent) anticipate that RBI will stick with a pause on the repo rate in the second half of the current fiscal.

Out of the key measures imposed to curb price rise, one-third of the respondents noted that imposing export duties on commodities will be the most beneficial to tame inflationary pressures.

About 55% of the respondents were of the view that improving ease of doing business along with government’s thrust on capital spending, especially in infrastructure related sectors will help further crowd-in private investments. This will stimulate growth in other sectors of the economy through its multiplier effect.

More than half of the respondents (53 per cent) said that capacity utilisation in their companies would range between 75-100 per cent during Q2FY24.