Business confidence in the country in the second half of the current financial year has improved from that in the first, according to the 60th Business Outlook Survey of the Confederation of Indian Industry.

The survey has put the CII Business Confidence Index for October 2003–March 2004 at 64.9 points, up 3.3 points from 61.6 in April-September 2003.

The survey covered 215 companies in all industry sectors, including small, medium and large enterprises, from different regions.

Respondents rated current and expected performance on a scale of 0-100. A score above 50 indicates positive confidence, while a score above 75 stands for strong positive confidence.

 "A 3.3 points increase over the previous index reflects the good monsoons, strong macro indicators, favourable corporate results and the resulting boom in the stock markets, which together have led to an increase in positive sentiments across the industry," the survey said.

The Current Situation Index, which compares current business conditions with the previous six months, is up 4 points at 60.2.

"This means industry perceives business conditions to be better than they were six months back," the survey said.

The Expectation Index, which reflects the perceptions of the respondent with regard to the performance of his company, his sector and the economy in the coming six months, stands at 67.2, up 3.1 points over the last survey.

A majority of the respondents (67 per cent) said in this fiscal, the gross domestic product would grow at more than 6 per cent.

While 21 per cent felt economic growth would be between 5.5 and 6 per cent. Just 8 per cent of the respondents said the economy would grow at 5-5.5 per cent and only 3 per cent were of the opinion that growth would be less than 5 per cent.

For 2004-05, a majority of the respondents (61.2 per cent) expected GDP growth to remain above the 6 per cent mark.

"We foresee two consecutive years of high growth, similar to that experienced in the mid-nineties," the survey added.

The survey added that a majority of the respondents (69.3 per cent) were looking at fresh capital investments in their existing businesses.

While 97.1 per cent of the respondents foresee a growth in production for their companies in 2003-04, 2.9 per cent expect production levels to decline.

According to the survey, 50.4 per cent of the respondents are expecting no change in employment levels in the second half of the year, while 33.6 per cent expect an increase. Only 16 per cent expect employment levels to drop.

With regard to exports, a majority of the respondents are expecting demand to increase in the next six months.

While 67.3 per cent expected an increase in terms of volume, 63.6 per cent were expecting an increase in terms of value, the survey said.

The survey also said 55.5 per cent of the respondents were of the opinion that the exchange rate over the last six months was correctly valued.