Despite cost pressure from rising prices of raw materials, India Inc is high on business confidence, according to the Federation of Indian Chambers of Commerce and Industry (FICCI).

As per the latest business confidence survey conducted by the industry body for the first quarter of the current fiscal year, the overall Business Confidence Index has gone up from 71.6 points in the fourth quarter of ’04-05 to 73.5 points in the last quarter, reports Our Delhi Bureau.

However, a majority of companies surveyed didn’t have any investment plans in the next six months and there’s bad news for the working population too. The employment index has dropped down which means that a majority of respondents do not have plan to hire in the next six months. The survey based on responses from 478 companies having a turnover between Rs 1 crore and Rs 60,000 crore in the manufacturing and services sector noted that the Employment Index was down to 21 points in the first quarter this fiscal from 23 points in the fourth quarter of last fiscal.

While the Current Conditions Index, which tracks the current situation vis-à-vis the situation in the last six months, was pegged at 70.9 points in the first quarter, the expectation index — which tracks expected situation in the next six months — has increased to 74.8 points from 73.6 points in the fourth-quarter of ’04-05.

“The Indian industry is looking at strong demand despite being worried about the rising input costs,” FICCI secretary general Amit Mitra said releasing the survey here.

“They are responding to the increasing input costs by capitalising on economies of scale and enhancing efficiency to sustain their margins,” he added.

The survey stated that there has been a marginal decline in the Investment Index at 37 points in the first quarter from 42 in the preceding quarter. Only 46% of the respondents said they had plans for new investments in the coming two quarters and 9% expect a decline on this front, as per the survey.

The Sales Index on the other hand has increased from 63 points to 73 points, indicating optimistic sales prospects as nearly 76% of the respondents expect an increase in the sales volume.