 "CII business index improves in final quarter")
After experiencing some moderation in Business Confidence Index (BCI) during the Oct-Dec FY15 (third quarter) reported by Confederation of Indian Industry (CII) the fourth quarter of the BCI has shown a slight improvement.
BCI improved to 56.4 in fourth quarter (Jan-March FY15) from a level of 56.2 in the previous quarter.
“The improvement in confidence level also assumes significance as the BCI was much lower at 49.9 in the same quarter last year,” said CII in its statement.
It should be noted that the index value of 50 is the dividing line between positive and weak confidence index.
A similar improvement was also seen in the Expectation index which moved from 57.6 (third quarter) to 57.8 (fourth quarter).
The survey is based on responses received from over 150 industry members. Majority of respondents (48%) belonged to large-scale sector, while medium and small scale companies comprised of 17 per cent and 35 per cent respectively.
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Further, the largest 50 per cent of respondents were from services, followed by 44 per cent from manufacturing and 6 per cent from primary sector.
A majority (55%) of the respondents expect GDP growth to settle in the range of 6.5-7.5 per cent in FY15.
“This is directly in line with 7.4 per cent GDP growth in FY15 as per the revised estimates of CSO,” said CII.
Expectation of recovery in sales, coupled with sharp decline in input costs, led to relatively higher proportion (47.6%) of respondents expecting an increase in profit-after-tax during fourth quarter, as compared to 33.6 per cent in the previous quarter.
Citing the downside risk to growth, the respondents viewed that the moderation in domestic growth, a slow revival of the global economy and high borrowing costs have emerged as the top three concerns affecting the economy.