New Delhi: Business confidence in Indian industry improved for the first half of the current fiscal even as concerns about the global economic downturn weighed on their responses to a survey by the Confederation of Indian Industry, or CII, a business lobby.
The bi-annual CII Business Confidence Index stood at 58.7 points, on a scale of 1 to 100, for the first six months of this fiscal, an increase of 2.4. It’s the first increase after two consecutive periods of decline.
“The rise in the index reflects better expectations for the coming six months and confirms our belief that the worst is likely to be over for the economy,” said Chandrajit Banerjee, director general of CII, in a press release.
Half of the 374 survey respondents said they expected increased production while 82% said they do not expect a decline in employment, suggesting that companies would aim to retain workers as they reckon that an uptick in growth is around the corner.
But present economic conditions continue to be challenging, as reflected in the Current Situation Index that slid 2.5 points between April-September 2009-10.
The Expectations Index, which together with the Current Situation Index comprises the Business Confidence Index, rose 4.9 points.
“One of the reasons why confidence would have gone up is because the markets are up. But it is a little premature to comment on whether a sustainable recovery will take place,” said Dharmakriti Joshi, chief economist at credit rating company Crisil Ltd.