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CII Business Confidence Index improves in Q3 FY23

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  • Published
    20th Jan, 2023


  • The Confederation of Indian Industry Business Confidence Index (CII- BCI) has shown an apparent increase in the October-December 2022 quarter, indicating the optimism Indian industry and the country’s economic resilience.


About the index:

  • The index rose to the level of 67.6 during the quarter, up from 62.2 in the previous July-September 2022 quarter.
  • The Index is based on the findings of a survey of over 120 firms of varying sizes and across all industry sectors and regions of the country.
  • Growth is expected to moderate further in the next year on global headwinds. Hence, to support growth, it is critical that RBI refrains from raising the interest rates any further.
  • The latest first advance estimates of GDP for the current fiscal put the GDP print at 7 per cent.
  • Nearly half of the respondents (47 per cent) have indicated that they have already started feeling the impact of the policy rate hikes by the RBI on the overall economic activity, revealed the survey.
  • High interest rates have impinged on private investment levels too.
  • Currently most of the heavy lifting to support growth is being done by public capex, with private capex playing a supporting role.
  • Even as global economic growth is witnessing headwinds due to the tightening financial conditions and geopolitical tensions, an overwhelming 73 per cent of the survey respondents expect only a moderate impact on the Indian economy.
  • In addition to high borrowing costs, the prevailing heightened uncertainty has prevented firms from furthering their investment plans.

Key findings:

  • The index presents an encouraging prognosis with 90 per cent feeling that their company's investment cycle will recover during the next fiscal.
  • Around 52 per cent expect recovery during the first half of the next fiscal while about 37 per cent of them foreseeing a pickup in investments by the second half of the year.
  • Nearly half of the survey respondents feel that the capacity utilisation levels in their companies would range between 75-100 per cent during the Oct-Dec quarter.
  • It is encouraging to note that given its bearing on the overall economy, a recovery in the rural demand is eagerly awaited and about 60 per cent of the respondents feel that a pick-up in rural consumption will take place in the next fiscal.
  • With a resumption of business activity, expectations for the Oct-December quarter have improved as majority of the respondents anticipate an increase in sales (60 per cent) and count of new orders (55 per cent).
  • Consequently, the profit outlook for the quarter has strengthened as nearly half of the respondents (47 per cent) foresee an increase in profit margins, despite the majority of them indicating high input costs.

Confederation of Indian Industry (CII):

  • It is a non-government, not-for-profit, industry-led and industry-managed organization.
  • It was founded in 1895; its headquarters is in New Delhi.
  • It works to create and sustain an environment conducive to the development of India, partnering industry, Government and civil society, through advisory and consultative processes

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