India's current economic environment conducive for private investments: CII survey

New Delhi: India's current economic environment is conducive for private investments with the country emerging as a "bright spot" amid the challenging global environment, according to a CII survey.

The pan-India survey is an ongoing initiative, which would be completed for 500 firms by the first week of February. The interim results are based on a sample of 300 firms spread across all industry sizes (Large, Medium and Small).

Notably, early results reveal that about 97 per cent of the sample firms are likely to increase employment in both 2024-25 and 2025-26.

In fact, 79 per cent of the respondents' firms said that they added more people over the past three years.

The CII survey, which was conducted over the past 30 days, suggests that 75 per cent of the respondents believe that the current economic environment is conducive to private investments.

"Given that 70 per cent of the firms surveyed said that they would invest in FY'26, an uptick in private investments might be on the cards over the next few quarters", said Chandrajit Banerjee, Director General, CII.

"Even though geopolitical fault lines have disrupted global supply chains and have posed serious challenges to global growth, India has emerged as a bright spot amid this challenging global backdrop. The sound economic policies initiated by the Government helped revive the economy with emphasis on public capex-led growth," stated CII.

The industry survey was conducted to assess the pickup in private-sector investments, employment in the private sector and growth in wages in the private sector.

The average increase in direct employment due to planned investments in the next year is expected to be in the range of 15 to 22 per cent between the manufacturing and services sectors respectively.

Similar expectations were seen in the interim results on indirect employment with manufacturing and services firms expecting about 14 per cent increase in indirect employment respectively over and above the existing levels of employment.

Majority of the firms surveyed indicated that it takes anywhere between 1 to 6 months to fill in vacancies of Senior management, Management/ Supervisory level, while regular and contractual workers take less time to fill in a vacant position indicating the need to fill the availability of skilled staff at the higher level in sample firms.

"With the two critical drivers of growth - private investments and employment - looking positive, we feel confident that the overall growth is likely to remain around a stable 6.4-6.7 per cent this year and is likely to be 7 per cent in FY26", said Banerjee.

On wages growth, which has impact on personal consumption, 40 to 45 per cent of sample firms surveyed saw an increase in average wage growth for senior management, managerial/ supervisory roles and regular workers in the range of 10 to 20 per cent in FY 25. The trend was similar in FY 24.

"These are promising results, exhibiting confidence about some of the important aspects of the economy. That said, results of the survey, when read along with various other emerging economic indicators, will help in a comprehensive understanding of the economy", underlined the Director General of CII.