India: Business confidence improves, but concerns about stagnant reforms linger

India's business leaders are more confident today than in the previous quarter, but they remain worried about the slow pace of economic reforms and the rising cost of finance and raw materials, a survey conducted by the Confederation of Indian Industry shows. 

According to India's Economic Times newspaper, more than 40 percent of survey respondents expect India's economic growth to range between 7 and 7.5 percent for the fiscal year ending March 31, 2013, while 30 percent expect GDP growth to top 7.5 percent.

For the year ended March 31, 2012, India's economic growth rate was 8.8 percent, the paper said.

The majority of the companies surveys also expect an increase in domestic and international investments, as well as an improvement in capacity utilization.

However, companies remain concerned about the slow pace of economic reforms and the high cost of financing, the paper said, echoing some of the worries that prompted Standard & Poors to downgrade its outlook for India from stable to negative last week.

S&P's main concern was India's large budget deficit and failure to increase government revenue through reforms like the implementation of a goods and services tax (or value-added tax) and a new "direct tax code" that would eliminate many exemptions for categories like mutual funds.