New Delhi: Business climate in the country improved in March on factors such as rising production of intermediate goods and the government's reform initiatives, according to a report.
The BluFin Business Cycle Indicator (BCI), which reflects various macroeconomic trends on a monthly basis, stood at 166.6 points in March, 4.7 percent higher compared to the same month last year, suggesting that the Indian economy is growing at a faster rate than the previous year.
Historically, the BCI has grown by an average of seven percent year-on-year, financial information provider BluFin said today.
Moreover, BCI has been indicating a reversal in the economic slowdown since July 2012 and expects that economic growth in India to gather momentum by the second quarter of financial year 2013-14.
"The key factors behind the strong improvement were improving foreign trade statistics, rising production of intermediate goods, moderating international metal prices and policy reforms leading to shrinking expenditures, rising revenues and lower government borrowing," the report said.
Additionally, indicators such as earnings from railway freight traffic and electricity production have also shown a significant improvement compared to the same time last year.
However, domestic air travel and a weak currency has impacted the growth.
"The BCI's sustained uptrend over the past few months raises our confidence in suggesting that a forward recovery in the Indian economy over the next few quarters is being telegraphed by our model. However, it appears that the recovery in the quarters to come is likely to be slower than in past recoveries," BluFin Senior Advisor Surjit Bhalla said.
"The recovery signalled by the BCI is riding primarily on an improving intermediate sector, apart from a declining interest rate regime. The rise in Gross Fixed Capital Formation over the past few quarters signalling rising government investment in infrastructure projects corroborates the improvement in this sector," BluFin Vice President (Research and Development) Debopam Chaudhuri said.