Industry’s business confidence better in Jan-March quarter

Tribune News Service

New Delhi, March 31

After experiencing some moderation in business confidence during October-December, the CII Business Confidence Index (BCI) has shown signs of improvement during January-March.

This is evident from the fact that the index has moved up to 56.4 during the period from a level of 56.2 in the previous quarter. The improvement in confidence level also assumes significance as the BCI was much lower at 49.9 in the same quarter last year. It should be noted that the index value of 50 is the dividing line between positive and weak confidence index.

Chandrajit Banerjee, director-general, CII, said “The survey reinforces the CII view that business sentiment has been turning positive on the back of pro-reforms approach of the government, a stable macro-economic environment and a focus on pertinent issues such as the ‘Make in India’ campaign launched by the government.”

The 90th Business Outlook Survey is based on responses received from over 150 industry members. Majority of respondents (48%) belonged to large-scale sector, while medium and small scale companies comprised 17% and 35%, respectively. Further, the largest 50% of respondents were from services, followed by 44% from manufacturing and 6% from primary sector.

A majority (55%) of the respondents expect GDP growth to settle in the range of 6.5-7.5% in FY15. This is directly in line with 7.4% GDP growth in FY15 as per the revised estimates of CSO.

In a welcome sign, while GDP is expected to register high growth rate, inflationary expectations have moderated. A considerable proportion (72%) of respondents believe that wholesale inflation will remain below 6% level in FY15, which should provide a legroom to RBI to soften the monetary policy in favour of growth.