"The sharp rise in the index reflects better prospects for the coming six months and indicate that the economy has indeed bottomed out", said Mr. Chandrajit Banerjee, Director General, CII.
Based on a large sample of about 450 companies, the CII-BCI is constructed as a weighted average of the Current Situation Index (CSI) and the Expectations Index (EI).
While CSI improved by 3.4 points when compared to the year ago period, EI which reflects the expectation of Indian industry with regard to performance of their company, sector and the economy gained 8.1 points compared to the first half of 2009-10 and the EI for the second half of 2009-10 improved by 13 points.
Majority of the respondents expressed optimism on various aspects of the economy. While GDP was expected to come in at 6-7 per cent, majority of the respondents expected the inflation to be under 5 per cent in 2009-10 indicating the despite the hike in commodity prices the inflationary risks were low.
When it came to economy recovery, 80 per cent of the respondents believed that Indian economy would witness a turnaround and begin returning to normal growth it is only in the second half of 2009-10.
The survey also looked into various aspects such as the investment, capacity utilization, production, and employment.
While the responses on exports and value of production were optimistic, the global economic instability followed by slackening consumer demand and infrastructural and institutional shortages continue to be the biggest concerns of the country's business world.