The survey found that the business confidence index for the fourth quarter of 2011-12 stood at the value of 52.9 against 48.8 during the previous quarter. The same stood at 66.7 during the fourth quarter of 2010-11.
"Although the index value is showing a moderate recovery for the past two quarters, it remains at a depressed level and far below the levels achieved in the previous year," said CII Director General Chandrajit Banerjee.
"The implementation of a few key reforms in the areas of indirect taxation, pricing of administered products and increasing FDI limits would go a long way in raising business confidence and improving the growth outlook for the economy," he added.
The survey, based a sample size of 200 companies, said that 41.8 percent respondents expected the gross domestic product (GDP) growth rate in 2012-13 to be in the range of 7-7.5 percent, while 31.8 percent expected it to be higher than 7.5 percent.
While average inflation stood at 8.8 percent in 2011-12, it said 24.7 percent of the respondents expected it to be in the range of 7-8 percent in 2012-13 and 24.1 percent expected it be above 9 percent.
The survey revealed that 47.2 percent of the respondents expected domestic investments to increase during the April-June 2012, while 39.1 percent expected it to remain stagnant.