Soaring business optimism among India's corporate sector reported in the CII Business Confidence Survey
India's Economy Shows Resilience and Optimism Amid Global Uncertainties
India's economic outlook is looking increasingly positive, according to the findings of the 128th round of the CII Business Outlook Survey. The survey, which covered over 200 firms from various sectors and regions, reveals a resilient business environment that continues to adapt and grow amidst both opportunities and challenges.
The CII Business Confidence Index reached a two-quarter high of 68.2 in the second quarter of the financial year 2024-25 (FY25). This positive outlook on employment opportunities signals a broader economic recovery across sectors. Almost half of the respondents expect an improvement in hiring within their companies during the second quarter of FY25. In fact, 46% of the survey participants expect their companies to operate between 75-100% capacity, a significant increase compared to the previous quarter.
Capacity utilisation above 75% is a strong indicator for potential fresh investments, according to the Reserve Bank of India (RBI). Over half of the survey participants expect an increase in sales and new orders during the July-September quarter, further boosting the optimistic outlook. More than 59% of survey respondents anticipate a rise in private capital expenditure (capex) in the first half of FY25 compared to the second half of FY24, indicating a surge in business confidence.
The upcoming festive season is expected to further strengthen growth prospects. Despite global uncertainties, India's economic growth has been steady. Key factors contributing to this optimism include policy continuity and post-election economic momentum. The general elections provided a boost to economic activity in India.
However, the survey also highlighted geopolitical tensions, rising global commodity prices, and slowing external demand as top worries for businesses. CII has cautioned that uncertainties in the global landscape remain and will need to be monitored closely.
The surge in business confidence is attributed to a buoyant outlook on India's economic prospects. The index was 67.3 in the previous quarter and 67.1 in the corresponding quarter of last year. The upcoming festive season, combined with these positive indicators, is expected to further bolster India's economic growth.
In conclusion, the CII Business Outlook Survey presents a picture of cautious optimism, with businesses confident about India's domestic growth trajectory but aware of potential global headwinds. The steady economic growth, coupled with a resilient business environment, bodes well for India's future economic recovery.
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