As India’s economy rebounds from a three-year low of 5.7% to 6.3% in the second quarter of the current fiscal, the business confidence in the country has also started rising up, according to CII Business Confidence Index (BCI). Companies in India are optimistic that the country’s economic growth will gain traction during the third quarter this fiscal.
The BCI has climbed up to the level of 59.7 during October-December 2017 compared to 58.3 in the previous quarter, reflecting an improvement in perception regarding overall economic conditions amidst indications of a normalisation in business situation post the recent disruptions like GST.
India’s GDP growth sharply rebound to 6.3% in fiscal second quarter July-September from a three-year low in the first quarter, as businesses sprung into economic activity ahead of a condensed festive season and accelerated production to build inventory after the implementation of GST. India’s GDP growth in the second quarter (Jul-Sep) accelerated to 6.3% from 5.7% in Apr-Jun and 6.1% in Jan-Mar, Central Statistics Office data showed. However, the pace of growth in Jul-Sep was still way below 7.3% recorded in the corresponding quarter a year ago.
“The survey underscores the perception that the economy is on a sustainable recovery path, with the many government interventions having an impact on the ground. The climb in business confidence underpins the hope that the upward trend one is seeing on macro figures would be sustained,” CII Director General Chandrajit Banerjee said.
The findings are a part of the Confederation of Indian Industry’s quarterly Business Outlook Survey, which is based on responses from large, medium and small companies, covering all regions of the country, PTI reported. “The significant improvement in the index this quarter has been led by a sharp improvement in the Expectation Index, as compared to the Current Situation Index, as firms appeared particularly upbeat about the expectations in their sectors,” the chamber said in a statement.
This comes a time when Moody’s and S&P praised India for its structural reforms leading to the formalisation of the economy. While Moody’s upgraded India’s ranking, S&P chose ‘wait and watch’ policy.