The Confederation of Indian Industry (CII) has reported that its Business Confidence Index has risen to a two-quarter high of 68.2 for the July-September period of this fiscal year, buoyed by policy continuity and a post-election economic upswing.
The 128th round of the CII Business Outlook Survey, conducted in September 2024, involved over 200 firms across various sizes, sectors, and regions. The industry body noted that economic momentum has accelerated following the recent general elections.
Despite ongoing global challenges, India’s economic growth has remained robust, with the upcoming festive season expected to further bolster growth prospects. However, the CII cautioned that persistent global uncertainties require careful monitoring of evolving economic conditions.
The survey highlighted several concerns among respondents, including geopolitical tensions, rising global commodity prices, and slowing external demand. Nevertheless, factors such as increased consumption—particularly in rural areas—consistent monsoon progress, ongoing reforms, and renewed private investment were identified as key drivers for growth in the current financial year.
Notably, 59% of respondents anticipate an improvement in private capital expenditure in the first half of FY25 (April-September), which is expected to support public investment that has shown signs of recovery after a slowdown due to election-related disruptions.
The survey also revealed that nearly 34% of respondents expect the Reserve Bank of India (RBI) to initiate a rate-cutting cycle by the third quarter of FY25 (October-December), while 31% foresee rate cuts in the fourth quarter (January-March).
"With banking liquidity in surplus, we anticipate potential easing in interest rates or a shift in policy stance from the central bank in the upcoming monetary policy meeting in October," the report stated.
In conjunction with these positive business prospects, there is also optimism regarding employment opportunities, with nearly half of the respondents predicting an improvement in hiring within their companies during the second quarter.
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