India business confidence up: CII

By agencies   |   Monday, 22 May 2006, 07:00 Hrs
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NEW DELHI: Expectations of more than 8 percent GDP growth and higher exports this financial year raised confidence among Indian businesses for first half to September 2006, a survey by the Confederation of Indian Industry (CII) showed.

The CII survey of 254 companies released Sunday showed the main business confidence index rose to 69.3 points for April to September 2006 from the September to March 2005/06 level of 67.2 points.

The higher confidence level revealed in the 65th survey of the country's largest industry lobby group, published every six months, comes despite expectations of an increase in input costs that may put pressure on profit margins.

Prices of key industrial inputs like furnace oil and metal prices have surged in the past few months, but the Indian government has held back from raising retail fuel prices.

The CII survey showed the expectations index, which reflects firms' outlook for the next six months, also increased to 70.8 points for April-September 2006, from 68.5 points in the previous half.

CII's current conditions index also increased to 66.3 points from 64.7 points as most respondents expect the Indian economy to grow by more than 8 percent in 2006-07. Indian businessmen also expect higher exports although 83 percent of respondents complained of procedural delays that were raising transaction costs.



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