New Delhi, Jan. 21: The Confederation of Indian Industry (CII) has raised its business confidence index on the back of improved conditions, perceptions of a higher growth and capacity expansion.

The index for October-March 2006-07 is 2.5 points higher at 71.8 than that in the April-September period.

The survey revealed that 85 per cent of the respondents plan to increase investments during the October-March period.

“Capacity utilisation across the board has increased and 58 per cent of the respondents have expressed confidence that it will be in the range of 75-100 per cent and another 24 per cent feel that it will exceed 100 per cent,” the survey said.

The value of production is also expected to increase in the October-March period, said 82 per cent of the respondents. For 79 per cent of the respondents, production increased in the first half of 2006-07.

A further rise in production is likely because of expected increase in new orders. Around 80 per cent of the respondents expect orders to increase in the second half of 2006-07. About 78 per cent of the respondents said new orders increased in the first half itself.

Employment is also expected to increase in the second half of this financial year, said 56 per cent of the respondents.

Around 73 per cent of the respondents see exports expanding in the October-March period. About 67 per cent of the respondents said exports increased during the April-March period. However, 67 per cent of the respondents felt that the procedural delays have not been reduced.

The index — constructed as a weighted average of the Current Situation Index (CSI) and the Expectations Index (EI) — was higher among the non-manufacturing services firms compared with manufacturing companies.

The CSI, which compares current business conditions with the previous six months, registered an increase of 3.4 points for the April-March period.

The EI, which reflects the perception of industry for the next six months, is up by two points for the October-March period.