The recent uptick in business confidence, as reported by the Overseas Investors Chamber of Commerce and Industry (OICCI), is a welcome change after three years of pessimism. According to the survey conducted in March-April — notably before tensions with India intensified — business sentiment has finally entered ‘positive territory.’ This shift is seen by the government as a vindication of its policies, with the finance minister claiming it reflects a trajectory of economic stability and investor confidence.
However, the picture remains nuanced. While 45% of respondents expressed optimism for the next six months — citing economic growth, improved policies, better security, and a more favorable investment climate — the majority still view the broader business environment with caution. Inflation and excessive taxation continue to dominate as major concerns. Other persistent anxieties include policy inconsistency, rupee devaluation, and political instability. In fact, more than half the surveyed businesses remain hesitant to commit to new investments due to these unresolved issues.
This dual reality should serve as a sober reminder for policymakers: improved sentiment does not necessarily equate to a stable or flourishing economy. Business confidence surveys, while useful in gauging perception, are inherently subjective and limited in scope. A factor that may benefit one sector — such as rupee devaluation boosting exporters — could simultaneously burden another through higher import costs and inflationary pressures.
Genuine economic recovery and sustainable investor confidence are better measured through objective indicators: actual increases in domestic and foreign investment, industrial growth, export expansion, and rising employment. Unfortunately, these metrics have not shown significant improvements to date. The middle class continues to feel the pressure of inflation, and private sector growth remains tentative.
To translate this fragile optimism into durable economic progress, the government must tackle key structural weaknesses. A clear and consistent tax policy, predictable exchange rate management, reforms in energy pricing, and broader political stability are essential. Moreover, boosting trust in institutions and ensuring continuity in economic policymaking beyond political cycles would help reinforce investor confidence.
It is also crucial that the positive tone struck by a segment of the business community is not used to mask deeper economic vulnerabilities. Public celebration of survey findings should be tempered with an honest recognition of existing challenges. The government must deliver results that are tangible not only for big business, but for small enterprises and ordinary citizens as well.
In conclusion, while the improved business sentiment is a positive sign, it is not in itself proof of long-term stability. The path ahead requires sustained reforms, institutional reliability, and inclusive economic policies to turn cautious optimism into real economic gains.
