New Delhi, Mar 8 (KNN) FICCI's Overall Business Confidence Index has witnessed a decadal high of 74.2 in the current round on account of improvement in present conditions as well as expectations, the industry body said.

The Overall Business Confidence Index stood at 74.2 in the current round, vis-à-vis the index value of 70.9 reported in the previous survey and 59.0 reported a year back. It revealed recovery of demand conditions, improved capacity utilisation and a promising outlook on various operational parameters.

The recently announced Union Budget 2021-22 has been forward looking, FICCI said.

''This together with measures announced as a part of the Atmanirbhar Bharat package has infused optimism amongst industry members and the same is corroborated in the improved outlook for various operational parameters,'' it added.

With regard to the constraining factors for business, the demand situation has improved on back of the release of pent-up demand built up during the lockdown.

However, rising raw material costs is emerging as a bothersome factor for members of India Inc. The rise in fuel and other commodity prices is beginning to exert pressure on the input costs of companies.

In the current survey, though the proportion of respondents anticipating better sales prospects in the near term remained unchanged at 66 per cent from the previous survey round; however, the companies were buoyed to regain some control over pricing power. About 27 per cent respondents expect an increase in the selling price of their products over the next six months as compared to 21 per cent stating the same in the previous round and 14 per cent a year back.

Improved economic conditions and greater pricing power is likely to drive profits of corporate India over the next two quarters. The percentage of participants citing higher profits over the next six months increased to 36 per cent in the latest survey from 33 per cent respondents stating likewise in the previous round.

Outlook on employment and exports also reported a discernible improvement. About 35 per cent respondents were optimistic about better hiring prospects over the next two quarters (up from 22 per cent stating the same in the previous round). Export prospects were also reported to be better in the current round with 41 per cent respondents indicating higher outbounds shipments. The corresponding number in the previous round was 27 per cent.

Furthermore, the proportion of respondents citing ‘higher to much higher’ investments in the coming six months witnessed an upswing in the current survey when compared to the previous round.

''31 per cent participants said that they foresee higher to much higher investments over coming six months as compared to 19 per cent participants stating likewise in the previous round,'' the survey stated.

The present survey drew responses from a wide array of sectors and was conducted during the months of January/February 2021. The survey gauges expectations of the respondents for the period January to June 2021.