Business sentiment has been upbeat in the second quarter of financial year 2019 with organisations being more optimistic of their growth, shows Confederation of Indian Industry's (CII) business confidence index which touched 64.9 in Q2FY19 as against 60.1 in the previous quarter.
The rise in the business confidence index is possibly because of the improved consumption and investment growth, said Chandrajit Banerjee, director general of CII.
"A steep rise in business confidence reflects positive vibes within the industry about the business environment. It underscores the hope that the facilitative government policies would result in a faster rise in output and new orders, which would spawn a host of business opportunities for firms and business units both in India and abroad,” said Banerjee.
This quarter, the improvement in the index is due to a rise in the Current Situation Index and the Expectation Index, found the CII survey, which included 200 responses from large, medium, small and micro firms. The findings indicate that the respondents are confident on the overall economic activity, along with their own company's business performance.
Nearly 64 percent of the respondents said that the GDP growth will lie in 6.5-7.5 percent range in 2018-19. Within the 64 percent, 36 percent expect the GDP growth to lie in the range of 7.0-7.5 percent while 28 percent foresee the GDP growth in the 6.5-7.0 percent range.
The business conditions are expected to improve in the near future as the survey predicted that 64 percent of the firms have anticipated an increase in the July-September sales.
On orders, 61 percent of the respondents are expecting an increase in the July-September period.
"Much of the recovery in business conditions is expected to be domestically driven as a large proportion of firms (58 percent) expect to maintain status quo on their export orders in July-September 2018," the survey found.
The findings come despite a rise in the input costs. The input costs include rise in the prices of raw materials and fuel and the increase in the wage expenditure.
A total of 65 percent of the respondents are confident that there will be an improvement in the private sector investment activity in the remaining quarters of this financial year.
"More than three out of four respondents feel that business environment has improved post the implementation of goods and services tax (GST)- particularly in terms of ease in paying taxes and transparency in the tax system," the survey found.
