New Delhi: Despite global challenges, India Inc on Sunday said that the country’s economic growth has held up well as the economic momentum has gained speed post the general elections. Amid improving domestic demand, the private capital expenditure or capex of Indian firms is likely to increase in the first half of FY25, despite a weak external environment and rising shipping costs in the country, according to a survey.

Besides, buoyed by the policy continuity, the business confidence index survey, conducted by leading industry body CII, surged to a two-quarter high of 68.2 in the second quarter of the current fiscal (July-September), as compared to 67.3 in the previous quarter and 67.1 in the corresponding quarter last year, the CII said in its 128th round of business outlook survey.

The Survey was conducted in September 2024, covering more than 200 firms of varying sizes across all industry sectors and regions. “Economic momentum has gained speed post the general elections. More than half of the respondents anticipate an improvement in private capex in the first half of FY25 (April-September) compared to the previous six months. This is encouraging as it is likely to provide support to public capex,” it said.

“Almost 34 per cent of the respondents anticipate the RBI to begin its rate-cutting cycle by Q3 FY25 (October-December), while another 31 per cent of them expect the central bank to cut rates by Q4 FY25 (Jan-March),” the industry body stated.

However, the survey further cautioned that the ‘uncertainty in the global scenario’ persists, necessitating a careful watch on the evolving economic conditions. A few niggling business concerns have also been highlighted by the respondents in the survey, with protracted geopolitical tensions, spike in global commodity prices and slowing external demand being the top three ones.

The survey respondents cited factors like 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.

“With banking liquidity in surplus in the recent period, we can expect the central bank to provide some easing in interest rates or at least a change in policy stance in the upcoming monetary policy in October. In tandem with the improvement seen in the business prospects, the industry has responded positively to the availability of employment opportunities across sectors,” the survey said.