Showing early signs of revival in business sentiments and coming as a major relief for the economy, which has been struggling with slowdown for the last several quarters, the CII Business Confidence Index (BCI) increased sharply to 54.9 during the October-December period of 2013-14 fiscal, from 45.7 in the previous quarter. CII Director General Chandrajit Banerjee stated that with the growing export performance and declining country’s imports, the slowdown in the domestic economy may have bottomed out in the second quarter and the trend could reverse henceforth.
Further, the survey highlighted that 58 percent of the respondents expect an increase in their sales in the third quarter of 2013-14 as against the 45 percent respondents during the previous quarter. A majority of the respondents around 42 percent felt that GDP growth in the current fiscal would remain in the range of 4.5 to 5 percent, whereas only 28 percent expected it to be in the range of 5 to 5.5 percent. Referring to exports’ growth outlook, CII survey noted that 53 percent of firms expect their exports to increase in the current quarter, up from 49 percent in the previous quarter. Moreover, 53 percent of the survey respondents expect fiscal deficit to remain below 5 percent mark despite the fact that subsidies will cross the budgeted target by a wide margin, and the impending general elections pose upside risk to government expenditure.
However, the CCI survey cautioned that the downside risks to economy’s growth have still not abated and supply side bottlenecks continue to pose a problem. CII has highlighted that the government should be careful about the upward risk to fiscal deficit amid falling tax collection and growing chances of disinvestment proceeds falling well short of target. Survey further noted that domestic economic and political instability, slackening consumer demand, high level of corruption, persistent high inflation and risk from exchange rate volatility are the top five concerns eroding the business sentiments in the country.
Further, the survey highlighted that 58 percent of the respondents expect an increase in their sales in the third quarter of 2013-14 as against the 45 percent respondents during the previous quarter. A majority of the respondents around 42 percent felt that GDP growth in the current fiscal would remain in the range of 4.5 to 5 percent, whereas only 28 percent expected it to be in the range of 5 to 5.5 percent. Referring to exports’ growth outlook, CII survey noted that 53 percent of firms expect their exports to increase in the current quarter, up from 49 percent in the previous quarter. Moreover, 53 percent of the survey respondents expect fiscal deficit to remain below 5 percent mark despite the fact that subsidies will cross the budgeted target by a wide margin, and the impending general elections pose upside risk to government expenditure.
However, the CCI survey cautioned that the downside risks to economy’s growth have still not abated and supply side bottlenecks continue to pose a problem. CII has highlighted that the government should be careful about the upward risk to fiscal deficit amid falling tax collection and growing chances of disinvestment proceeds falling well short of target. Survey further noted that domestic economic and political instability, slackening consumer demand, high level of corruption, persistent high inflation and risk from exchange rate volatility are the top five concerns eroding the business sentiments in the country.
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