Business Confidence picks up for period October – March 2007-08 after a decline during the period April-September 2007-08, said CII's 68th Business Outlook Survey.
CII's business confidence index (CII-BCI) at 66.3 was higher for the period October – March 2007-08 with an increase of 2.4 points when compared to the previous Business Confidence Survey for the period April-September 2007-08.
However, the Business Confidence Index is down by 5.5 points when compared to the corresponding period last year. The CII-BCI, constructed as a weighted average of the Current Situation Index (CSI) and the Expectations Index (EI), was higher among the non-manufacturing firms (68.3) engaged in provision of services as compared to manufacturing firms (65.1).
The CSI that compares current business conditions has witnessed a marginal increase of 0.2 points for the period October -March 2007-08 when compared with the previous six months.
However, when compared to the corresponding period last year, the CSI is down 6.3 points, thus reflecting a decrease in current business sentiments.
This reflects that a larger number of responding firms have not appraised better current conditions for growth of the overall economy, the sector in which they operate and their individual company growth performance to be no better compared to the previous six months, April-September 2007-08.
The EI that reflects the perceptions of Indian industry with regardsto performance of their company, sector and the Indian economy for the period October-March 2007-08 gained 3.5 points over the first half of the current financial year reflecting higher expectations in terms of performance during the second half of 2007-08.
However, the EI for second half when compared to the corresponding period last year is actually down by 5 points reflecting a lower growth expectations of GDP and other aggregates during 2007-08.
The CII survey revealed that GDP growth for the year 2007-08 is expected to be around 9%. This was revealed by 59% of the respondents and of these 22% of the respondents expect the GDP growth to be in the range of 9 – 9.5%.
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