The industry expects GDP growth rates to be lower than 6.5 per cent in 2012-13, shows a poll conducted by the Confederation of Indian Industry. The survey covered more than 100 senior industry leaders.
About 43 per cent of the respondents expect net sales growth to stagnate or decline during 2012-13.
On investment plans for expansion, 29 per cent have revealed contraction in expansion plans domestically. On investing abroad, 47 per cent of them have shown preference for maintaining the same levels of investment abroad as in last year, while 43 per cent of them said they would increase investments.
“This clearly, shows lower business sentiments domestically and the urgent need to improve the domestic investment climate,” CII said.
On employment of skilled workers, about 50 per cent of the respondents expected hiring to remain stagnant, while 15 per cent of them expected decrease in hiring activities. Similarly, on employment of unskilled workers, 46 per cent of the industry leaders expect hiring to remain stagnant and 42 per cent expected decline in 2012-13.
“This could have deleterious effects on the economy as there are more than 10 million workers entering the work force and if hiring by industry declines, the unemployment rate could shoot up,” CII said in a statement.
With most of the key indicators on growth expectations on the downside, 97 per cent of the respondents revealed the need for an urgent comprehensive economic revival package by the Government.