India's Business Sentiment on the Rise

India’s business sentiment experienced a significant uplift in the April-June quarter. The Business Confidence Index (BCI) climbed to 149.4, up from 139.3 in the previous quarter, as per the latest Business Expectations Survey by the National Council of Applied Economic Research (NCAER).

Key Drivers of Optimism

The index is based on four crucial components: expectations of overall economic improvement, anticipated betterment in firms’ financial positions, current investment climate views, and capacity utilisation levels. Over 60% of respondents were positive across all parameters.

Production and Demand Outlook

Optimism around production and domestic demand was notably strong, with 78.7% of firms expecting production to rise and 79.1% anticipating an increase in domestic sales. Export sentiment also improved, with 66.5% expecting a rise in outbound shipments.

Labor Market Stagnation

Despite overall optimism, hiring and wage expectations remained unchanged, indicating a stagnation in employment sentiment.

Survey Insights

Conducted in June, the survey covered 479 companies across six major Indian cities, revealing a buoyant outlook for business operations with 61% expecting pre-tax profits to rise.