As the world waits for green shoots to appear on the parched global economic landscape, India Inc is banking on the Government’s reform push to forge ahead.
However, business firms’ outlook for the economy in 2013-14 is at wide variance.
A majority of firms surveyed by Confederation of Indian Industry (CII) expected GDP growth subdued in the range of 5.5-6.0 per cent.
However, in a survey by industry chamber, Phdcci, 34 per cent of the respondents estimated GDP growth rate at around 6-7.5 per cent in 2013-14.
Interestingly, the mood of optimism and pessimism was equally strong in corporate India. While 33 per cent firms in the Phdcci survey said GDP growth rate would touch 7.5-9 per cent growth, an equal number expected it to fall below six per cent.
Reflecting continuing deterioration in the macroeconomic scenario, the CII Business Confidence Index dropped below the 50-point mark during the third quarter, against 49.9 during the same period last year. This is much below 55.0 recorded in the first quarter of 2012-13, CII said.
Chandrajit Banerjee, Director General, CII said the drop in business confidence was a matter of concern and required concerted policy intervention.
“While reform measures undertaken by the Government in the recent months will surely start yielding results, it is important that the momentum on reforms is not lost,” he added.
In CII’s 81st Business Outlook Survey, the majority of respondents rated domestic economic developments, high interest rates, infrastructure bottlenecks and institutional issues among the key concerns.
A total of 51.5 per cent firms expected domestic investments to register either a decline or no change “This is a worrying sign and underlines the need for pro-active measures to restart the investment cycle,” Banerjee said.
According to the ‘PHD Business Barometer 2013-14’, 75 per cent respondents felt that agriculture sector growth would stay within 2-4 per cent while the majority felt that industry sector would grow below six per cent.
Respondents across industry felt that amid the intensifying Euro Zone crisis, slowdown in the advanced world and its contagion spreading across the developing economies, the investment climate in India was that of despair, dampening corporate business sentiments.
However, 77 per cent respondents felt that the slowdown seemed to have bottomed out.
Source: The Hindu Business Line