A slowdown in industrial growth notwithstanding, corporate India's Business Confidence Index (BCI) has climbed to 154 points in the October-December quarter as against 146 points in the previous quarter.
"Though there are other signs of slowdown in industrial growth (the slower growth of the Index of Industrial Production in the first nine months of the current fiscal year), overall business sentiments have improved," National Council for Applied Economic Research (NCAER) said in its latest quarterly review.
This is the second consecutive increase in business confidence after two sluggish quarters during 2007, it said, adding it is now inching up to the January 2007 peak of 157.3 points.
Though all the four components of BCI contributed to its rise, the investment climate has emerged as the most important factor behind the surge, it said. The components include assessment of economy, financial position of firms, prevailing investment climate and capacity utilisation over the next six months.
According to the report, there is an increase of 13 per cent in the assessment of the investment climate as compared to the previous quarter. The large IPOs that were expected perhaps also reflected improved sentiments, it said.
On the future expectation of India Inc, NCAER report said firms hope to see improvement in their financial positions. The indicator has improved by 6.1 per cent over the levels seen in the previous round of the survey.
The overall economic conditions over the next six months are seen to be positive. The indicator is up by 4.1 per cent over the previous quarter, it said.
