Reform measures such as the Goods and Services Tax (GST) have instilled optimism in India Inc with CII’s Business Confidence Index climbing to 59.7 during October-December 2017, against 58.3 in the previous quarter, according to the findings of the Confederation of Indian Industry’s 101st edition of quarterly Business Outlook Survey.
However, a majority of the firms expected no change in their investment plans, with around 50 per cent expecting to maintain status quo in their domestic investment plans. On the international front, too, 59 per cent firms said they expected to keep their investment plans unchanged, said the survey based on responses from large, medium and small companies, covering all regions of the country, a CII release said. When asked to rank their concerns, the firms rated low domestic demand, followed by high commodity prices as the “major threats.”
According to the survey, business conditions are expected to improve as over 63 per cent of the firms anticipated an increase in sales in October-December 2017, compared with only 44 per cent who experienced the same in the previous quarter.
Companies also expected new orders to rise in this quarter. “Much of the recovery in business conditions is expected to be domestically driven as a large proportion of firms (62.2 per cent) expect to maintain status quo on their export orders in October-December 2017,” it added.
Commenting on the rebound in business confidence, Chandrajit Banerjee, Director-General, CII, said: “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.”