The industry is buoyed by policy continuity as the CII Business Confidence Index soared to a two-quarter high of 68.2 for the July-September period this fiscal, the lobby grouping said in its first survey after the Lok Sabha polls.
The 128th round of the CII Business Outlook Survey was conducted in September 2024, covering more than 200 firms of varying sizes across all industry sectors and regions.
Economic momentum has gained speed post the general elections, the industry body stated.
India's economic growth has held up well despite global challenges, CII said, asserting that the upcoming festive season portends well for fortifying growth prospects further.
However, it cautioned that the "uncertainty in the global scenario persists, necessitating a careful watch on the evolving economic conditions".
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A few niggling business concerns have been highlighted by the respondents in the survey, with protracted geopolitical tensions, spike in global commodity prices and slowing external demand being the top three ones.
The survey respondents cited factors like improvement in consumption, especially rural demand, steady progress in monsoon, continued emphasis on reforms and fresh sightings in private investment as the key reasons, which will drive growth in the current financial year.
More than half (59 per cent) of the respondents anticipate an improvement in private capex in the first half of FY25 (April-September) compared to the previous six months.
This is encouraging as it is likely to provide support to public capex, which has shown an uptick recently after a lull in the first quarter due to elections, CII said.
Almost 34 per cent of the respondents anticipate the RBI to begin its rate-cutting cycle by Q3 FY25 (October-December), while another 31 per cent of them expect the central bank to cut rates by Q4 FY25 (Jan-March).
"With banking liquidity in surplus in the recent period, we can expect the central bank to provide some easing in interest rates or at least a change in policy stance in the upcoming monetary policy in October," the survey said.
In tandem with the improvement seen in the business prospects, the industry has responded positively to the availability of employment opportunities across sectors.
Almost half of the respondents anticipate an improvement in the hiring situation in their companies during the second quarter.