According to the CII's bi-annual business outlook survey that polled 450 companies, Business Confidence Index, (CII –BCI) for October-March vaulted 7.4 points to 66.1 as compared to a 2.4 points increase during the first half of 2009-10 reflecting a surge in business confidence compared with to the past six months.
According to Chadrajit Banerjee, director general, CII, the sharp rise in the index points to improved prospects for the coming six months and indicate a bottoming out of the economy. However, some major concerns remain for the business community with continuing uncertain global economic outlook and slackening consumer demand, he added.
The CII-BCI index is a weighted average of the Current Situation Index (CSI) and the Expectations Index (EI). The CSI has seen a surprise surge after nearly two years of southward movement, gaining 5.9 points for the October-March period in comparison with the previous six months.
When compared with the corresponding period from last year, the CSI increased by 3.4 points suggesting the government's timely interventions with counter-cyclical fiscal and monetary measures seem to be working to lift the economy out of the worst global crisis since the great depression.
The EI reflects the Indian industry's company-wise expectation of the Indian industry with regards to performance of individual companies, sectors and the economy.
The EI gained 8.1 points for the October-March 2009-10 period as compared with the first half. In fact, the EI for the second half of 2009-10 has improved by a robust 13 points by way of comparison to the corresponding period last year, indicating the growing optimism about an economic turnaround in the second half.