BUSINESS CONFIDENCE BUOYANT DESPITE ECONOMIC HEADWINDS

OPTIMISM in the Indian economy has soared, both internationally and domestically, thanks to strong fundamentals and healthy demand drivers. Domestic demand is expected to gather momentum on account of sustained buoyancy in services, revival in rural demand, the government's thrust on capex, and healthy balance sheets of banks and corporates.

- CHANDRAJIT BANERJEE

The Reserve Bank of India's recent forward-looking surveys on consumer and industrial outlook also alluded to the sanguine economic prospects. Labour markets are also recovering well with a fall in unemployment and a rise in the labour force participation rate.

That said, there are some risks on the horizon mainly emanating from uncertainty prevailing in the global scenario due to flaring geopolitical tensions. However, the Indian economy remains well placed to tackle these challenges buttressed by its strong macroeconomic fundamentals.

Adding to the optimism are the findings of the recent Confederation of Indian Industry's (CII) 124th Business Outlook Survey for the second quarter of the financial year, which strongly reflect the confidence of industry.

The CII Business Confidence Index has continued its upward trajectory as it rose to a three-quarter high of 67.1 in the second quarter as compared to 66.1 in the previous quarter, reiterating the on-ground experience of most industry players.