New Delhi, July 17 (IANS): Indian industry remained upbeat about the business environment in the first quarter ended June owing to salary hikes recommended by the Seventh Pay Commission, progress of monsoons and the government's proactive reforms agenda, industry chamber CII said on Sunday.

"A rise in business expectations sends an early signal that industry is anticipating an upturn in demand propelled by factors such as implementation of the Seventh Pay Commission, progress of a favourable monsoon and pro-active reforms agenda of the government," Confederation of Indian Industry (CII) Director General Chandrajit Banerjee said in a statement here citing a survey conducted by the body.

The CII Business Confidence Index (BCI) has improved to 57.2 in April-June 2016, from 54.1 in the previous quarter.

Over 60 per cent of the 200 firms that participated in the survey expect the country's real GDP growth to range between 7-8 per cent in the current fiscal.

Moreover, 61 per cent of the firms expect an increase in sales in April-June 2016 compared with only 42 per cent in January-March.

"Much of the recovery in business conditions is expected to be domestically driven as a majority of the firms expect to maintain status quo on their export orders in April-June 2016," CII said.

Profit expectations have improved in April-June, with nearly half of the firms anticipating an increase in after-tax profit in the said quarter, it added.

The survey also found that a majority have put their investment plans on hold in the quarter under review, despite expectations of improvement in sales and new orders in the period in question.

"A large proportion of the firms (40 per cent) feels that a turnaround in the global economy is required to jumpstart the private investment cycle," the statement said.

"Firms, when asked to rank their concerns, rated low domestic demand, fragile global economic recovery and lack of political consensus on economic reforms as their top three concerns," it added.