CEOs pin their hopes on the new government

Around 50 per cent of Indian CEOs surveyed for a poll said they are optimistic about the Indian economy and expect it to be stronger in the next six months.

According to an Assocham CEO survey, Indian companies are already setting out agendas for the new Prime Minister, and expect the new Government to revive economic growth, fix inflation, bring down interest rates, and tackle unemployment.

Ipsos, in its Economic Pulse study, has shown that Indians are hopeful that the new Government would bring in stability, push economic growth and build investor confidence.

Expectation levels are soaring by the day among different segments of the economy, states the Assocham CEO survey, with stock markets, industry, trade, multilateral institutions and foreign investors seeing a massive change. Even heads of diplomatic missions are pinning their “excessive hopes” on the next Government, the survey notes.

“However, there are risks of highly built up expectations. Any deviations in the election results, contrary to expectations, can be very harmful because that can lead to a knee jerk reaction,” the Assocham survey has cautioned.

Though many companies have retained their optimism about India getting a decisive, strong and stable government, as many as 67 per cent of the corporate heads surveyed agreed that the expectations were excessive, at least on the delivery front.

“The run-up in the stock markets in the last few months is another pointer to a huge level of expectations. Our survey showed that in the last 20 years, there was never such a level of expectation from a new government,” noted Assocham secretary general DS Rawat, in a statement.

The survey showed that maximum optimism was seen in financial services, banking, real estate and the consumer goods sector.

As many as 54 per cent of the respondents said though issues like inflation and revival of economic growth would take time, they still expected some major morale boosting announcements from the new Government, that would help ease of doing business and unclogging of infrastructure projects stuck for environmental clearances.

Assocham surveyed nearly 450 CEOs from sectors including manufacturing, finance, real estates, banking and IT. The survey was conducted in Mumbai, Delhi, Bangalore, Ahmedabad, Kochi, Kolkata, Hyderabad, among other cities.

Research firm Ipsos has, however, noted that though the economic confidence level dipped in March, India continued to hold the 6th position as the most economically confident country in the world, after Saudi Arabia, Sweden, Germany, China and Canada.

The Ipsos’ economic pulse of the world study noted that only 35 per cent Indians believe, that the local economy which impacts their personal finance, is good.

“Inflation in India increased on account of higher food costs in March, breaking a three-month easing trend. This would give RBI little scope to support the economy amid fresh signs of a slowdown,” said Mick Gordon, Chief Executive Officer, Ipsos in India.

The Ipsos survey was conducted in March, among 18,675 people in 25 countries.