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Companies see a significant uptick in their business and growth prospects for the quarter ended September 2018 compared to the previous quarter, the Confederation of Indian Industry Business Confidence Index (CII- BCI) suggests.
The index stood at 64.9 per cent for the second quarter of FY19, as opposed to 60.1 per cent in the previous quarter.
Chandrajit Banerjee, Director General, CII, said in a statement: “There is a definite improvement in the tempo of business activity, powered by expectations of improved consumption and investment growth. A steep rise in business confidence reflects positive vibes within the industry about the business environment.”
The findings are part of the 104th edition of the quarterly Business Outlook Survey, which is based on nearly 200 responses from large, medium, small and micro firms, covering all the regions.
GDP growth
According to the findings, nearly 64 per cent of the respondents feel that GDP growth will lie in the range of 6.5-7.5 per cent in FY19.
On the inflation metric, a majority anticipate the price rise to be in the range of 4-5 per cent. Close to 42 per cent anticipate a further increase in policy rates in FY19.
Also, business conditions are expected to improve as over 60 per cent of the firms anticipate an increase in sales and new orders in July-September 2018.
Much of the recovery in business conditions is expected to be domestically driven, as a large proportion of firms expect to maintain status quo on their export orders.
Elevated profits
Despite a rise in input costs, such as raw materials, fuel and wage expenditure, there are general expectations of elevated profits after tax in Q2 FY19.
Around 65 per cent anticipate an improvement in private sector investment activity in the remaining quarters of FY19.
More than three out of four respondents feel the business environment has improved following the implementation of GST, particularly in terms of ease of paying taxes and transparency in the system.
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