New Delhi: The Business Confidence Index (BCI) has reversed its decline to grow 2.4 per cent between October and January this fiscal, thus indicating economic recovery, according to the National Council of Applied Economic Research (NCAER).

The Council attributed this recovery to improved expectations of overall economic conditions, financial position of the firms surveyed and investment climate although it noted there was no improvement in the capacity utilisation level.

"The BCI is higher by about 2.4 per cent over the level registered in October 2001. It is an upturn, stronger than seen in April 2001, but as yet only one indicator of improving business conditions," NCAER said in its Business Expectations Survey for January 2002.

Terming this improved sentiment as a "possibility of change from the prevailing poor business sentiments", however, the Council warned that as a leading indicator of economic activity, there must be a sustained rise in the BCI for more than a quarter.

The survey points to a range of measures adopted by firms in the second half of the last decade to improve efficiency. These include changes in scale of operations and operational strategies while noting that labour force restructuring also remained a commonly adopted approach.

PTI