Buoyed by policy continuity and strong domestic demand, especially in rural India, business optimism has soared among India Inc and the industry remains bullish on business sentiments in FY25, a survey showed on Sunday.

The Confederation of Indian Industry (CII) Business Confidence Index rose to a two-quarter high of 68.2 in the second quarter of the current financial year (July-September period), as compared to 67.3 in the previous quarter and 67.1 in the corresponding quarter last year.

The survey respondents cited factors such as 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 as compared to the second half of FY24.

This is encouraging as this is likely to provide support to public capex which has shown an uptick recently after a lull in the first quarter due to elections, the findings showed.

“In tandem with the improvement seen in the business prospects, industry has responded positively on 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,” the report mentioned.

The upcoming festive season portends well for fortifying growth prospects further. That said, the uncertainty in the global scenario persists, necessitating a careful watch on the evolving economic conditions, according to the leading industry chamber.

The survey highlighted that more than half of the respondents anticipate sales and count of new orders in their companies to increase in the July-September quarter.

Consequently, most of the respondents (46 per cent) feel that the capacity utilisation levels in their company would range between 75-100 per cent during the quarter ending September 2024.

“This level is higher than the proportion witnessing such capacity utilisation levels in the previous quarter. Moreover, capacity utilisation between 75-80 per cent is a propitious sign as it helps to fuel fresh investments in the economy as per the RBI,” the survey report noted.