NEW DELHI: India’s economy being the fastest-growing is a fact recognised all over the world and industry leaders are confident that it will remain resilient in the face of any global headwinds and uncertainties. This is proved by the CII’s latest Business Confidence Index, which achieved its highest reading in two years for the October-December quarter.
According to a statement by the Confederation of Indian Industries, “Reflecting the optimism around India being in a ‘sweet spot’ despite the rising global uncertainties, the latest CII Business Confidence Index rebounded to its highest reading in almost two years of 67.6 in the October-December quarter from 62.2 in the previous quarter.”
Moderate impact
Despite tightening financial conditions and geopolitical tensions globally, around 73 per cent of the survey respondents expected only a moderate impact of the global slowdown on the Indian economy, the CII said.
The confidence among respondents stems from the fact that 86 per cent believe that the Government’s focus on infrastructure is the biggest positive for the economy, followed by the improvement in tax collections and good consumption recovery, it said. The survey was conducted during the November-December 2022 period. It saw the participation of more than 120 firms of varying sizes from across all industry sectors and regions.
“Growth is expected to moderate further in the next year on global headwinds. Hence, to support growth, it is critical that the RBI refrains from raising the interest rates any further. Unsurprisingly, 47 per cent have indicated that they have already started feeling the impact of the policy rate hikes by the RBI on the overall economic activity,” said the CII statement.
Rural economy
Respondents also felt that policymakers have focused on the rural economy, which took a significant hit especially after the second wave of the Covid-19 pandemic and the more recent spike in inflation.
With a resumption of business activity, expectations for the October-December quarter improved as 60 per cent of the respondents anticipated an increase in sales and 55 per cent expected an improvement in the count of new orders.
Consequently, the profit outlook for the quarter strengthened as 47 of the respondents foresaw an increase in margins, despite the majority of them indicating high input costs.
