BY ARUP ROYCHOUDHURY
Government's focus on infrastructure is the biggest positive for the Indian economy, followed by the improvement in tax collections
and good consumption recovery.
Industry leaders have expressed confidence in India's economy being resilient in the face of global headwinds in uncertainties,
with the Confederation of Indian Industries' Business Confidence Index achieving its highest reading in two years for the October-
December quarter.
According to a statement by the industry body, "Reflecting the optimism around India being in a 'sweet spot' despite the rising
global uncertainties, the latest CII Business Confidence Index rebounded to its highest reading in almost two years of 67.6 in the
October-December quarter from 62.2 in the previous quarter. "The sharp improvement in the value of the index was buttressed by
subsiding concerns around the impending recession and its impact on the Indian economy," the statement said.
Despite tightening financial conditions and geopolitical tensions globally, around 73 per cent of the survey respondents expected
only a moderate impact of the global slowdown on the Indian economy, CII said.
The confidence among respondents stems from the fact that 86 per cent believe that the government's focus on infrastructure is
the biggest positive for the Indian economy, followed by the improvement in tax collections and good consumption recovery, it said.
The survey was conducted during the November-December 2022 and saw the participation of more than 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 the RBI refrains from raising the interest rates any further.
"Unsurprisingly, 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," said the statement, adding that high interest rates have impinged on private investment levels, too. "In
addition to high borrowing costs, the prevailing heightened uncertainty has prevented firms from furthering their investment plans.
"The survey results, however, presents an encouraging prognosis with nearly all the respondents (90 per cent) feeling that their
company's investment cycle will recover during the next financial year," it said.
Respondents also felt that policymakers have focused on the rural economy, which took a significant hit especially after the second
wave of the Covid-19 pandemic and the more recent spike in inflation. "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."
