CII predicts over 7% GDP growth in '06

The country's GDP for the year 2005-06 is expected to grow more than 7 per cent, according to the Confederation of Indian Industry's 64th Business Outlook survey.

For the period September 2005-March 2006, CII's business confidence index at 65.7 was 1.5 points higher than that for the previous period, April-September 2005.

The CII-BCI, constructed as a weighted average of the current situation index and the expectations index, was higher by 4.4 points among the service firms as compared with manufacturing firms.

The CSI that compares current business conditions with the previous six months has gained 0.9 points, reflecting that a larger number of responding firms have appraised better current conditions for growth of the overall economy and seen the sectors in which they operate and their individual growth performance to be better, compared with the previous six months.

The EI that reflects the perceptions of industry with regard to performance of companies, sectors and the economy for the next six months is up by 1.7 points over the previous business outlook survey.

Non-manufacturing firms, once again, turned out to be more bullish on growth prospects compared with manufacturing firms.

The survey revealed that 80 per cent of the respondents plan to increase investments during the second half of 2005-06 and about 60 per cent expressed confidence that capacity utilisation for the second half will be up to 100 per cent, while 19 per cent were confident it will exceed 100 per cent.

Eighty per cent expect the value of production to increase in the next six months, while 84 per cent of the respondents see new orders increasing in the next six months. About 65 per cent revealed that new orders had increased in the first half.

Eighty-four per cent of the respondents say they expect employment to increase in the second half, while 44 per cent say that employment has increased during the first half of this financial year.

On exports, 78 per cent of the respondents express confidence in expansion during the second half of 2005-06 while 51 per cent say exports have increased during the first half.  However, 70 per cent feel that procedural delays have not been reduced.