Indicating a sharp improvement for the second consecutive quarter, the CII Business Confidence Index (CII-BCI) for July-Sept quarter FY15 has shot up to 57.4, up from 53.7 in April-June quarter and 49.9 in Jan-March quarter this year. During the same quarter last fiscal, the index had touched the all-time low value of 45.7. The number 50 is the dividing line on the index between positive and weak business confidence.

Commenting on the upward march in the value of index, Chandrajit Banerjee, Director General, CII, said that "the determination shown by the new government at the Center to provide an impetus to growth along with reviving the ‘feel good' factor has sent the business confidence index soaring for the second quarter in a row. In order to capitalise on the early signs of improving business sentiments, we must ensure that this momentum is maintained going forward."

The 88th Business Outlook Survey is based on responses from over 150 industry members. Majority of the respondents (44 per cent) belong to large-scale sector, while medium scale companies comprise another 12 per cent.  Around 38 per cent and 6 per cent respectively are from the small-scale and micro firms. Further, 60 per cent of the respondents are from manufacturing and 36 per cent are from the services sector.

The highest percentage (41 per cent) of respondents expected GDP in the current fiscal to expand by 5.0-5.5 per cent, up from sub-5 per cent growth witnessed in the last two years. In fact, 30 per cent respondents expected GDP to grow in a range of 5.5-6.0 per cent in FY15, which indicates that 6 per cent growth is within reach this year. "We have already started this financial year on an impressive note with the first quarter GDP recording a growth of 5.7 per cent, up from 4.6 per cent in the previous quarter."  

WPI Inflation is expected to average 5.5-6.5 per cent in FY15, which is slightly on a higher side considering the likelihood of a sub-normal monsoon this year. "The management of inflationary expectations through supply-side measures would hold the key for ensuring continued momentum of economic revival," suggested Banerjee.

The expectation of higher economic growth in the current fiscal is rooted in optimism about the overall demand situation. A significant 77 per cent of the respondents expected their sales to increase in the July-Sep quarter, much higher than 50 per cent respondents in the previous quarter. Similarly, 49 per cent of the respondents expected their export orders to increase in July-Sep quarter compared to 39 per cent respondents in the previous quarter.

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