The CII Business Confidence Index (CII- BCI) for January-March 2017 quarter rose to an all-time high of 64.1 as against 56.5 recorded in the previous quarter. The sharp increase in business sentiment has majorly been driven by a significant uptrend in the Expectations Index (EI) though the Current Situation Index (CSI) also improved marginally.

1. 98th Business Outlook Survey
April 2017

2. 98TH BUSINESS OUTLOOK SURVEY
1Highlights
98th
BUSINESS OUTLOOK SURVEY
(January-March 2017)
HIGHLIGHTS
 The CII Business Confidence Index (CII- BCI) for January-March 2017 quarter rose to an all-time high of
64.1 as against 56.5 recorded in the previous quarter. The sharp increase in business sentiment has
majorly been driven by a significant uptrend in the Expectations Index (EI) though the Current Situation
Index (CSI) also improved marginally.
 Major share of the respondents (41 percent) expect 2016-17 GDP growth data to be revised down.
 Close to half of the respondents expect CPI inflation to rise above the 3.2% level recorded in January.
 Majority of the respondents (52 percent) expect to see the positive impact of GST after a year of its
implementation.
 More than three out of four respondents feel that the tax proposals announced in the budget will have
positive implications on the Indian economy.
 Nearly half of the respondents (49 percent) feel that the pace of digitization is adequate.
 A significant proportion of respondents expect an increase in new orders (60 percent) and sales (63
percent) in Jan-Mar 2017.
 Major proportion of the respondents (55.2 percent) expect capacity utilization to improve in Jan-Mar
2017 quarter.
 Majority of the firms expect to maintain status quo on their investment plans for Jan-Mar 2017.
 Profit expectations have improved with a large proportion of respondents expecting an increase in PAT
in Jan-Mar 2017.
 Low domestic demand, fragile global economic recovery and high commodity prices emerge as the top
concerns in the coming six months.

3. 98TH BUSINESS OUTLOOK SURVEY
2Business Confidence Index
BUSINESS CONFIDENCE INDEX
The CII Business Confidence Index (CII- BCI) for January- March 2017 quarter surged to an all-time high of 64.1
as against 56.5 recorded in the previous quarter. The sharp increase in business sentiment has majorly been
driven by a significant uptrend in the Expectations Index (EI) though the Current Situation Index (CSI) also
improved marginally.
The respondents in the survey were asked to provide a view on the performance of their firm, sector and the
economy based on their perceptions about the previous and current quarter. The CII-BCI was then constructed
as a weighted average of the Current Situations Index (CSI) and the Expectation Index (EI).
Both the CSI and EI are at their record peaks but a comparison of the two indicates a sharp improvement in
the EI due to a strong improvement in sentiment across all categories. CSI, on the other hand, improved despite
a drop in sentiment about the overall economy. It would be pertinent to note that CSI reflects sentiment for
the previous quarter, i.e. Q3FY17 (Oct-Dec 2016), in which the demonetization announcement had engendered
uncertainty and transitory disruption that could have influenced the responses.
QuarterlyBusinessConfidenceIndex(BCI)
Index
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
Q3FY16
Q4FY16
Q1FY17
Q2FY17
Q3FY17
Q4FY17
Business Confidence Index 49.9 53.7 57.4 56.2 56.4 54.4 53.4 53.9 54.1 57.2 58.0 56.5 64.1
Current Situation Index 47.3 50.1 51.4 53.5 53.5 52.2 49.3 50.7 50.7 52.3 54.5 57.2 58.5
Overall Economy 40.4 46.8 51.2 55.0 54.3 54.8 48.6 50.2 52.0 54.9 55.9 56.7 54.4
Own Activity Sector 44.0 46.8 49.2 49.4 52.7 48.3 45.4 48.8 47.6 48.1 49.6 54.1 56.7
Own Company 51.9 53.4 52.9 55.8 53.8 54.0 52.1 52.2 52.3 54.2 57.3 59.5 61.0
Expectation Index 51.2 55.5 60.5 57.6 57.8 55.4 55.5 55.5 55.9 59.7 59.8 56.1 66.9
Overall Economy 46.1 52.0 59.9 59.2 58.1 57.9 54.0 56.2 57.5 60.6 59.6 53.5 66.0
Own Activity Sector 49.1 54.6 59.1 54.5 57.5 51.8 53.3 55.0 52.2 58.0 56.9 52.2 65.3
Own Company 54.3 57.3 61.6 59.1 57.9 57.1 57.5 55.5 57.8 60.4 61.7 59.5 68.2
* The Survey is conducted on a quarterly basis since the 74th Business Outlook Survey

4. 98TH BUSINESS OUTLOOK SURVEY
3General Economic Prospects
GENERAL ECONOMIC PROSPECTS
GDP GROWTH
GDP growth in 2016-17 expected to be revised down by 41 percent and revised up by 37 percent of respondents.
The second advance estimates peg GDP growth at 7.1% y-o-y in FY2017. However, nearly two-fifth of the
respondents (41 percent), expect a downward revision in the data while 37 percent expect an upward revision.
The next annual estimate will be released on 31 May, 2017, along with the data for the fourth quarter of
FY2017 (Jan-Mar 2017).
40
45
50
55
60
65
70
Q2FY13
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
Q3FY16
Q4FY16
Q1FY17
Q2FY17
Q3FY17
Q4FY17
98th Business Outlook Survey
BCI CSI EI
56.5 57.2
56.1
64.1
58.5
66.9
50
52
54
56
58
60
62
64
66
68
Business
Confidence Index
Current Situation
Index
Expectation Index
98th Business Outlook Survey
Q3FY17 Q4FY17
Revised up
37%
Revised down
41%
Don’t know
22%
Expected Revision in 2016-17 GDP data
(% of Respondents)

5. 98TH BUSINESS OUTLOOK SURVEY
4General Economic Prospects
INFLATION
Close to half of the respondents expect CPI inflation to rise above the 3.2% level recorded in January.
About 47 percent of the respondents expected inflation levels to rise above the 3.2% mark recorded in January.
This rise in inflationary expectations is mainly on account of the rise in global commodity prices which has resulted
in higher input costs. The RBI has projected inflation to rise to 4.0-4.5 percent in the first half and further to 4.5-
5.0 percent in the second half of FY2018.
GST
Majority of the respondents (52 percent) expect to see the positive impact of GST after a year of its
implementation.
The Goods and Services Tax (GST) is likely to be implemented around 1st
July, 2017 and more than half of the
respondents (52 percent) anticipate that it will take a year to see a positive impact on the Indian economy.
Cumulatively, a significant proportion of respondents (85 percent) feel that it could take anywhere between 6
months to a year to see the positive impact of GST.
Inflation to rise
47%
Inflation to fall
30%
Can’t say
23%
Expected trend in Inflation
(% of Respondents)
5
33
52
10
Next quarter After two quarters After a year Not in the near term
Expected positive impact of GST
(% of Respondents)

6. 98TH BUSINESS OUTLOOK SURVEY
5General Economic Prospects
UNION BUDGET TAX PROPOSALS
More than three out of four respondents feel that the tax proposals announced in the budget will have positive
implications on the Indian economy.
The Finance Minister announced a number of tax proposals in the Union Budget 2017-18 encompassing both
the individual and corporate sector. The proposal to lower income tax rate to 5% for the INR 2.5-5 lac slab,
impose a 10% surcharge on taxable income between INR 50 lacs-INR 1 crore, reduce corporate tax rate to 25%
for MSME’s with total turnover up to INR 50 crore and impose a lower presumptive income rate of 6% (of their
turnover) for small and medium taxpayers are all expected to have a positive impact on the economy by a
significant majority of the respondents (77 percent)
DIGITIZATION OF INDIAN ECONOMY
Nearly half of the respondents (49 percent) feel that the pace of digitization is adequate.
The efforts at moving towards a digital economy seems to be adequately paced with about 49 percent of the
respondents sharing this view. The recent demonetization initiative of the government was also driven towards
a digital economy.
Positive
77%
Negative
3%
Not sure
20%
Impact of Union Budget Tax proposals on Economy
(% of Respondents)
Yes
49%
No
26%
Maybe
25%
Pace of digitization adequate?
(% of Respondents)

7. 98TH BUSINESS OUTLOOK SURVEY
6General Business Prospects
GENERAL BUSINESS PROSPECTS
CAPACITY UTILISATION
Major proportion of the respondents (55.2 percent) expect capacity utilization to improve in Jan-Mar 2017
quarter.
Around 55 percent of respondents expect capacity utilization to be in range of 75-100 percent in Jan-March 2017
quarter as compared to 33 percent of respondents who witnessed the same in the Oct-Dec 2016 quarter. Overall
expectations of capacity utilization have improved with a cumulative 64.7 percent of respondents anticipating
capacity utilization levels to be above 75% while only 35.8 percent of respondents experienced the same in the
Oct-Dec 2016 quarter.
INVESTMENT PLANS
Majority of the firms expect to maintain status quo on their investment plans for Jan-Mar 2017.
More than half of the firms (54.2 percent) expect to keep their domestic investment plans unchanged in Jan-Mar
2017. Concurrently, a significant proportion of domestic firms (65.2 percent) expect to maintain status quo on
their international investments as well during the said quarter.
Firms are keeping investment plans on hold despite the expectation of an improvement in sales and new orders
in the Jan-Mar 2017 quarter owing to the existing excess capacity in the economy.
14.2
50.0
33.0
2.82.9
32.4
55.2
9.5
Below 50% 50-75% 75-100% Above 100%
Capacity Utilization
(% of Respondents)
Actual (Oct-Dec 2016) Expected (Jan-Mar 2017)
10.8
34.9
54.2
16.7 18.2
65.2
Decline Increase No change Decline Increase No change
Domestic Investments International Investments
Investment Plans for Jan-Mar 2017
(% of Respondents)

8. 98TH BUSINESS OUTLOOK SURVEY
7Overall Trends
OVERALL TRENDS
OVERALL SALES & NEW ORDERS
A significant proportion of respondents expect an increase in new orders (60 percent) and sales (63 percent) in
Jan-Mar 2017.
Nearly two thirds of the respondents (63 percent) anticipate an increase in sales in Jan-Mar 2017 as against 39
percent of the respondents who experienced an increase in sales in the Oct-Dec 2016 quarter. Parallelly, about 60
percent of the respondents foresee an increase in new orders in the Jan-Mar 2017 quarter as compared to 41
percent of respondents who witnessed the same in the Oct-Dec 2016 quarter.
EXPENDITURE
A majority of respondents anticipate an increase in wages and salaries, while raw material, fuel and credit costs
are expected to remain unchanged in Jan-Mar 2017.
More than half of the respondents (54.2 percent) expect an increase in wages and salaries in Jan-Mar 2017 quarter
as compared to 48.9 percent who witnessed the same in the previous quarter.
On the other hand, a major proportion of respondents anticipate no changes in the cost of raw material (50
percent), electricity and fuels (57.1 percent) and credit (57.3 percent) in Jan-Mar 2017 quarter.
29
39
32
25
41
35
14
63
23
11
60
29
Decline Increase No change Decline Increase No change
Sales Count of New Orders
Overall Sales & New orders
(% of Respondents)
Actual (Oct-Dec 2016) Expected (Jan-Mar 2017)

9. 98TH BUSINESS OUTLOOK SURVEY
8Overall Trends
PROFITS AFTER TAX
Profit expectations have improved with a large proportion of respondents expecting an increase in PAT in Jan-
Mar 2017.
A major share of the respondents (44 percent) anticipate an increase in profits after tax (PAT) in the Jan-Mar
2017 quarter as compared to 31.6 percent of respondents who experienced the same in the preceding quarter.
It is interesting to note that profit expectations have improved in the Jan-Mar 2017 quarter even though a large
share of respondents (40 percent) experienced a decline in PAT in the Oct-Dec 2016 quarter.
8.4 7.7 2.3 1.2 3.4 6.0
14.6 15.9
39.8 42.3
40.7 41.7
48.9
54.2
28.0 26.8
51.8 50.0
57.0 57.1
47.7
39.8
57.3 57.3
Actual (Oct-
Dec 2016)
Expected (Jan-
Mar 2017)
Actual (Oct-
Dec 2016)
Expected (Jan-
Mar 2017)
Actual (Oct-
Dec 2016)
Expected (Jan-
Mar 2017)
Actual (Oct-
Dec 2016)
Expected (Jan-
Mar 2017)
Total Raw Material Cost Electricity and Fuel Cost Wages and Salaries Cost of Credit
Input Cost
(% of Respondents)
Decline Increase No change
40.0
31.6
28.4
21.1
44.4
34.4
Decline Increase No change
Profits after Tax
(% of Respondents)
Actual (Oct-Dec 2016) Expected (Jan-Mar 2017)

10. 98TH BUSINESS OUTLOOK SURVEY
9Business Concerns
EXPORT AND IMPORT
Majority of the firms anticipate no changes in their exports and imports in the Jan-Mar 2017 quarter.
Domestic firms expect status quo on their external trade front, with a majority of respondents (61.8 percent)
expecting no changes in their exports in Jan-Mar 2017 quarter as compared to 61.3 percent of respondents who
witnessed the same in the previous quarter. On similar lines, a significant proportion (63.9 percent) foresee an
unchanged import scenario in Jan-Mar 2017 quarter as against 70.1 percent who witnessed no changes in the Oct-
Dec 2016 quarter.
BUSINESS CONCERNS
Low domestic demand, fragile global economic recovery and high commodity prices emerge as the top concerns
in the coming six months.
21.3
17.5
61.3
19.5
10.4
70.1
11.8
26.3
61.8
16.7 19.4
63.9
Decline Increase No change Decline Increase No change
Exports Imports
Exports and Imports
(% of Respondents)
Actual (Oct-Dec 2016) Expected (Jan-Mar 2017)
6.7
14.4
16.3
18.3
44.2
0 10 20 30 40 50
Upward risk to food inflation
High borrowing cost
High commodity prices
Fragile global economic recovery
Low domestic demand
Top business concerns
(% of Respondents)

11. 98TH BUSINESS OUTLOOK SURVEY
10Coverage & Methodology
COVERAGE & METHODOLOGY
CII’s 98th
Business Outlook Survey is based on sample survey of firms covering all industry sectors, including micro,
small, medium and large enterprises from different regions. The survey also enumerated responses across
industry groups both in public and private sectors engaged in manufacturing and services sector.
The survey was conducted from January-March 2017, covering more than 100 firms of varying sizes. Majority of
the respondents (41.0 per cent) belonged to large-scale firms, while 12 per cent were from medium-scale firms
and 37 per cent and 10 per cent were from small scale and micro firms, respectively. Sectoral break up shows that
64 per cent of the respondents were from manufacturing sector while 35 per cent were from services sector and
1 per cent from primary sector, respectively.
CII-BCI is calculated as a weighted average of the Current Situation Index (CSI) and the Expectation Index (EI), with
greater weight given to EI as compared to CSI. These indices are based on questions pertaining to performance of
the economy and the respondents’ sector and firm. Respondents are asked to rate the current and expected
performance on a scale of 0 to 100. A score above 50 indicates positive confidence while a score above 75 would
indicate strong positive confidence. On the contrary, a score of less than 50 indicates a weak confidence.

12. 98TH BUSINESS OUTLOOK SURVEY
11Coverage & Methodology
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