Business confidence has just started picking up, if we go by the findings of some recent surveys. Covid-19 hit the Indian economy hard, but with the situation improving and roll-out of country-wide vaccination programs, our entrepreneurs have become optimistic about financial performance of their own business and the overall economy in the days to come. While all these sound like a big relief, Covid-19 statistics of the last few weeks seem to be a big dampener.

The Dun & Bradstreet's composite CFO Optimism Index for January-March posted an increase of 23.6 percent. With this, the optimism has touched almost the pre-Covid level during the corresponding quarter last year when it was 123.5. Over 350 CFOs were surveyed. Views were sought on twelve parameters, including liquidity position, operating margin, etc. and it was found that the optimism level increased 14.4 percent in the industrial sector and 27.4 percent in the services sector.

Similarly, a recent FICCI survey finds the business confidence index at a decadal high. It stood at 74.2 in the current round, against the index value of 70.9 reported in the previous survey and 59 reported a year back. Nearly 27 percent respondents expect an increase in selling price of their products over the next six months. Again, another survey shows that the manufacturing sector is expected to regain the lost momentum in the fourth quarter. Exports prospects were also reported to be better.

But while everything seems to be going fine at the surface, it is now widely feared that a surge in coronavirus cases in the country in recent weeks could hurt the Indian economy's recovery. The number of infections have risen, forcing authorities to clamp partial lockdowns in several places. The Centre has so far been reluctant to take any harsh step, but if the resurgence of Covid-19 continues, it could soon have no way out. A better solution must be found.