India Inc’s BCI improves to 57.2 in April-June 2016: CII survey

Showing the upbeat mood of the Indian Inc., the Confederation of Indian Industry’s (CII) Business Confidence Index (BCI), improved by 5.73% to 57.2 in April-June 2016 from 54.1 in the previous quarter. The industry body said that business environment was good in the first quarter ended June due to salary hikes recommended by the Seventh Pay Commission, progress of monsoons and the government's proactive reforms agenda.

In the CII’s survey where 200 firms participated in the exercise, more than 60 per cent of the total respondents were expecting the real GDP growth to range between 7-8 per cent this financial year. Business conditions are also expected to improve as 61 per cent of the firms expect an increase in sales in April-June 2016 compared with only 42 per cent in January-March. Whereas a large proportion of the firms about 40 per cent feel that a turnaround in the global economy is required to jumpstart the private investment cycle. Firm’s top three concerns were domestic demand, fragile global economic recovery and lack of political consensus on economic reforms.

The survey stated that a rise in business expectations sends an early signal that industry is anticipating an upturn in demand propelled by factors such as implementation of the Seventh Pay Commission, progress of a favorable monsoon and pro-active reforms agenda of the government. Report also added, optimism in business sentiment this quarter has been backed by strong expectations of economic growth for 2016-17.