Higher domestic demand to bolster private investments
NEW DELHI : Private investments are expected to pick up thanks to a rise in domestic demand and high capacity utilization, the Confederation of Indian Industry’s Business Confidence Index (CII-BCI) survey showed. Two-thirds of the survey’s respondents expect sales and new orders to increase in the second quarter of FY24 faster than in the previous quarter, while half the respondents (53%) feel that capacity utilization in their company would be 75-100% in the September quarter.
About 67% of the survey’s respondents also anticipated an increase in sequential sales in the second quarter of the current fiscal, while 64% of respondents anticipated an increase in new orders during the same period. The survey, conducted in September, covered about 200 companies of varying sizes from across the country.
“In the last two surveys, too, the majority of respondents had expected their capacity utilization to be in the range of 75-100%, which is an encouraging sign as capacity utilization needs to be maintained between 75 and 80% to fuel fresh investments in the economy," CII director-general Chandrajit Banerjee said. “The expectation of an improvement in rural demand is reassuring and is much required for the inclusive growth of the economy," Banerjee added.
In August, chief economic adviser V. Anantha Nageswaran had said that private sector capital formation, supported by the government’s capex push, had taken off, with investment intentions coming back in a big way.
He added that while growth prospects for India appeared bright, external factors (slowing global growth and rising oil prices) posed a great risk to the economy. The government, which has allocated a record capex budget of ₹10 trillion for FY24, hopes to drive growth
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