CII’s 122nd edition of the Business Outlook Survey indicates a moderation of the index to a reading of 64.0 in the fourth quarter (Jan-Mar FY23) as compared to 67.6 in the previous quarter and 65.0 in the same quarter last year. The moderation came in the backdrop of a simmering banking crisis unfolding in the US and EU which has rattled the global financial markets.
On the growth front, 51 per cent of respondents feel that Indian economy will grow between 6.0-7.0 per cent in FY24. Among these, around 27 per cent of the respondents feel that GDP growth will lie in 6.0- 6.5 per cent range – in line with RBI’s revised growth forecast of 6.4 per cent for FY24.
About 28 per cent of the respondents feel that government’s continued focus on capital spending in infrastructure will help boost growth in the next fiscal. Further, pick-up in private investment (21 per cent) and moderating global oil and commodity prices (19 per cent) are likely to provide much needed impetus to domestic growth in FY24.
On the investment front, majority of the respondents (51 per cent) felt that the capacity utilisation levels in their company would range between 75-100 per cent during 4QFY23, even as most of them (43 per cent) experienced capacity utilisation levels in the 50-75 per cent range in the previous quarter.
In an encouraging sign, more than half of the respondents (64 per cent) anticipate an increase in sales and count of new orders in their company in fourth quarter of FY23 – in line with the expected increase in their level of capacity utilisation.
Further, more than a quarter of the respondents (28 per cent) have indicated tight financial conditions as their greatest biggest concern for the next six months, while 23 per cent of the respondents have hinted at slowdown in global growth to impact their business sentiments for the same period.