India’s business sentiment is bullish and expectations from the economy are at an all-time high, a business outlook survey carried out by the Confederation of Indian Industry has revealed.
The CII Business Confidence Index (BCI) for the quarter to March has surged to a record high of 64.1as against 56.5 recorded in the previous quarter.
“The turnaround in business expectations gives credence to a growth narrative based on improved business sentiment and investor confidence,” said Chandrajit Banerjee, director general, CII.
The survey calculates BCI based on the responses from more than a 100 large, medium, small and micro firms across the country, on questions related to the performance of their firm, sector and the economy based on their perceptions about the previous and current quarter.
Over 77% of respondents expressed optimism with regard to budget tax proposals and 52% expected the goods and services tax (GST) to have a positive impact on the economy after a year of its implementation.
About 41% of the respondents expected a downward revision in the GDP data, while about 47% expected inflation levels to rise above the 3.2% recorded in January. This notwithstanding, business conditions are expected to improve as over 63% of the firms expect an increase in sales in the fourth quarter of FY2017.
In the external sector, majority of the domestic firms surveyed do not expect a change in their import-export ratios and investment plans are likely to be held at status quo during the quarter to March.
The survey also threw up some concerns, with about 44% respondents anticipating low domestic demand and expressing apprehension with regard to a fragile global economy and high commodity prices, all major issues in the coming six months.