By IANS,
New Delhi : India’s Business Confidence Index (BCI) for the first half of 2008-09 has moderated by 5.3 points on concerns of global economic uncertainties and high interest rates, a Confederation of Indian Industry (CII) survey suggests.
The 69th CII Business Outlook Survey says that the BCI for April-September 2008-09 was higher among the manufacturing firms (61.4) as compared to non-manufacturing firms (60.5) engaged in provision of services.
The CII survey, however, pointed out that outlook for GDP growth is expected at 8 percent plus and investments are expected to be on track.
“The Current Situation Index (CSI) that compares current business conditions has lost 3.1 points for April-September 2008-09 compared to last six months and 2.9 points compared to the corresponding period last year. This reflects the sentiments related to decline in growth of industrial production,” said CII.
The Expectations Index (EI) that reflects the perceptions of Indian industry with regards to performance of their company and the Indian economy lost 6.4 points in first half of the current financial year reflecting lower expectations in terms of performance.
The survey also revealed that 67 percent of the respondents plan to increase investments during April-September 2008-09.
About 73 percent of the respondents expect the value of production to increase in the next six months.
“On exports, 63 percent of the respondents expressed confidence in exports expansion, while 91 percent felt that the procedural delays have been a long-standing hurdle for exporters, which raises transactions costs and needs to be addressed urgently,” said the survey.
Global economic instability has been the top concern of the respondents followed by high interest rate and cost and availability of labour. About 62 percent of the respondents expect global economic uncertainty to impact their company’s earnings.
Moreover 33 percent of the respondents think that interest rate should be reduced to boost investment and consumer demand, while 28 percent of the respondents feel that diversification of export market would help counter possible impact of US economic slowdown on their exports.