Business Expectations Index
India's Business Expectations Index (BEI) is derived from surveys of businesses — primarily the RBI's Order Books, Inventories and Capacity Utilisation Survey (OBICUS) and the Industrial Outlook Survey (IOS) — measuring forward-looking expectations of companies on production, demand, employment, and capacity utilisation.
RBI conducts two primary business surveys that generate business expectation data. The Industrial Outlook Survey (IOS) is a quarterly survey of manufacturing firms covering the assessment of general business conditions, production, order books, exports, capacity utilisation, employment, input cost pressures, and selling price expectations. The IOS generates Business Assessment Index (BAI) for the current quarter and Business Expectations Index (BEI) for the next quarter.
The OBICUS (Order Books, Inventories and Capacity Utilisation Survey) is a complementary quarterly survey tracking order books and inventory levels, providing insight into demand-supply balances. Together, these surveys give RBI's MPC real-time intelligence on the industrial economy's momentum between GDP data releases.
NCSAER also publishes a Business Confidence Index (BCI) through its quarterly survey of companies across sectors. The BCI tracks expectations on sales, production, capital expenditure, and hiring. Private sector research firms like FICCI, CII, and Dun & Bradstreet periodically conduct business sentiment surveys covering similar themes.
Capacity utilisation data from OBICUS is critical for understanding whether the economy has sufficient capacity to absorb investment or whether new capacity creation is required. RBI has historically used capacity utilisation thresholds in its assessment of when the investment cycle is likely to revive — high utilisation (above 75-80%) creates the incentive for businesses to invest in new capacity.
For equity market participants, business expectation surveys are useful coincident and leading indicators for corporate earnings cycles. Rising expectations for order inflows and production typically precede earnings upgrades for industrial, capital goods, and auto ancillary companies. MPC meeting minutes frequently reference OBICUS and IOS data in contextualising the growth outlook alongside PMI and IIP.