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India Inc is not too upbeat about the growth prospects, going by the mood of industry leaders.
A poll conducted by the Confederation of Indian Industry (CII), among the members of its National Council, covering 75 companies, shows that a majority of CEOs remain pessimistic about the economic outlook for the current year and expect only a moderate recovery in the forthcoming year.
Another quarterly survey, the business confidence survey by the Federation of Indian Chambers of Commerce and Industry (FICCI) reveals that the overall Business Confidence Index for the first quarter of 2012-13 stood at 51.8, down from 60.3 in the preceding quarter.
The FICCI survey, covering close to 150 companies, was conducted between July and August to bring out corporate expectations for the period July-December.
The CII poll results indicate that GDP growth during 2012-13 is expected to remain below 6.0 per cent by as many as 44 per cent of the respondents. The FICCI survey further adds to the gloom with 50 per cent of the respondents believing that the GDP growth could be less than 5.5 per cent.
“The scenario is not likely to improve drastically in 2013-14 either, as more than half of the respondents (52 per cent) expect GDP growth to remain in the range of 6.0-6.5 per cent,” CII said in a statement.
The poll results indicate that as many as 76 per cent of the respondents do not expect reforms such as Goods and Service Tax to move forward, given that the general elections are due in 2014.
The FICCI survey adds to the sombre industry mood stating, “The deficient rainfalls have had a clear impact on industry with 85 per cent of respondents admitting being hit by drought-like situation.”
The chamber said that for the first time since 2008-09, the prospect of employment opportunities has turned negative, which, coupled with the ongoing slowdown, may force the economy into a ‘jobless de-growth’.
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