Business sentiment: CII-BCI rises for third straight quarter to 66.5; firms upbeat on demand, capex outlook

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CII’s Business Confidence Index (BCI) climbed to a five-quarter high of 66.5 in the third quarter of FY26, marking the third consecutive quarterly rise and reflecting optimism around demand, profitability and investment conditions, the industry body said on Sunday.Domestic demand continues to be the key growth driver, with nearly two-thirds of firms reporting higher demand in Q2 FY26 and about 72 per cent expecting further improvement in Q3 FY26. This outlook has been supported by GST rate cuts and festive consumption, news agency PTI reported, citing the survey. The CII-BCI is based on a sample of more than 175 firms across manufacturing and services, covering micro, small, medium and large enterprises from different regions, and was conducted between the first and third week of December 2025.Investment and hiring intentions remain robust, according to the survey. Notably, 69 per cent of respondents expect the Reserve Bank of India to cut the repo rate by the end of Q4 FY26. The survey also pointed to a positive impact from GST cuts effective September 22, with 56.3 per cent of firms expecting sales to rise between 5 and 20 per cent in the coming quarters.Commenting on the findings, CII Director General Chandrajit Banerjee said, “The steady rise in business confidence shows industry’s ability to navigate external headwinds, anchored by resilient domestic demand and a robust reform agenda.” He added that growth momentum is expected to strengthen further in the months ahead.Looking ahead to the Union Budget for 2026-27, CII expressed confidence that reform momentum would continue. It suggested sustaining capital expenditure, including launching a revitalised Rs 150-lakh crore National Infrastructure Pipeline 2.0, with a focus on shovel-ready, revenue-generating projects to crowd in private investment, as per PTI.The industry body also proposed measures to enhance long-term competitiveness, including strategic funding platforms, regulatory digitisation, innovation-led growth and a stronger banking ecosystem to support India’s growth ambitions.