Business confidence index soars in Q1 amid robust growth

The CII Business Confidence Index (CII-BCI) jumped to 66.1 in April-June from 64.0 in the previous quarter, reaffirming the positive momentum seen in high frequency indicators such as goods and services tax collections, air and rail passenger traffic, and Purchasing Managers’ Index, said the Confederation of Indian Industry.

As per the survey, released on Sunday, 65% respondents said fresh sightings in private investment will be sustained in this financial year.

India Inc maintains that the robust capital expenditure (capex) momentum of the government, strong domestic drivers and a strong financial system are expected to be the key drivers of growth in this fiscal, the survey said. CII director general Chandrajit Banerjee said the positive momentum seen in the first quarter of 2023-24 is encouraging and reiterates the on-ground experience of industry players. “The improvement in demand has translated into an improvement in capacity utilisation in many sectors, which will lend further impetus to private capex this year,” he said, commenting on the findings of the survey.


Respondents said private capex is being driven by numerous factors, including deleveraged corporate balance sheets, which have enhanced corporates' ability to invest once there is clear clarity on demand.

In the survey, 63 respondents said GDP growth in this fiscal is expected to range between 6-7% in line with the projection of 6.5% by the Reserve Bank of India (RBI) and other multilateral agencies. The CII said that 53% of the respondents said they expect the Reserve Bank of India to maintain the status quo on the key interest rates in the first half of this fiscal. This pause by the RBI is expected to reduce the cost of capital for India Inc, fuelling fresh investments and giving a boost to private capex.