Indian industry remained confident about the business environment in the first quarter ended June because of salary hikes suggested by the Seventh Pay Commission, progress of monsoons and the government's positive reforms agenda, industry chamber CII has said.
"A rise in business expectations sends an early signal that indus try is anticipating an upturn in demand propelled by factors such as implementation of the Seventh Pay Commission, progress of a favourable monsoon and pro-active reforms agenda of the government," Confederation of Indian Industry (CII) Director General Chandrajit Banerjee said in a statement in national capital
The CII Business Confidence Index (BCI) rose to 57.2 in April-June 2016, from 54.1 in the previous quarter.
Over 60 per cent of the 200 firms that participated in the review believe the country's real GDP growth to range between 7-8 per cent in the current fiscal.
Besides, 61 percent of the firms expect an increase in sales in April-June 2016 compared with only 42 per cent in January-March.
"Much of the recovery in business conditions is expected to be domestically driven as a majority of the firms expect to maintain status quo on their export orders in April-June 2016," CII said.
Profit prospects have enhanced in April-June, with nearly half of the firms anticipating an increase in after-tax profit in the said quarter, it added.
Review also found that a majority have put their investment plans on hold in the quarter under review, notwithstanding expectations of improvement in sales and new orders in the period in question.
"A large proportion of the firms (40 per cent) feels that a turnaround in the global economy is required to jumpstart the private investment cycle," the statement said.
"Firms, when asked to rank their concerns, rated low domestic demand, fragile global economic recovery and lack of political consensus on economic reforms as their top three concerns," it added.