India's economic growth may fall below 6%A majority of CEOs are pessimistic about the Indian economy and feel
that the gross domestic product (GDP) growth would fall below six
percent in the current fiscal and will be in the range of 6 to 6.5
percent in 2013-14.
According to a snap poll conducted by the
Confederation of Indian Industry (CII) among the members of its National
Council shows that a majority of chief executive officers (CEOs) remain
pessimistic about the outlook for the economy in the current year and
expect only a moderate recovery in the forthcoming year.
The
poll results indicate that GDP growth during 2012-13 is expected to
remain below six percent by as many as 44 percent of the respondents
while no one expects it to cross seven percent.
Another 44
percent expect it to remain between 6 and 6.5 percent. The scenario is
not likely to improve much in 2013-14 either as more than half of the
respondents (52 percent) expect GDP growth to remain in the range of 6
to 6.5 percent, while only 36 percent expect it to lie between 6.5
percent and 7.5 percent.
"This reflects low confidence levels
in industry. The first quarter GDP growth at 5.5 percent corroborates
the fact that the slowdown is sustaining," Chandrajit Banerjee, director
general, CII, said in the survey report.
According to data
released by the Central Statistical Organisation (CSO) Friday the Indian
economy grew at a sluggish 5.5 percent in April-June 2012 period as
compared to 8 percent in the corresponding quarter of previous year.
"Our
best hope would be that the economy is bottoming out. However, from the
results of the snap poll or from government data, we do not have
adequate indicators to substantiate this hypothesis," Banerjee said.
On
inflation,56 percent CEOs expect the average rate of inflation in
2012-13 to be in the range of seven to eight percent, while 32 percent
of the respondents expect it to be between six to seven percent.
Only
12 percent expect to higher between eight to nine percent. These
expectations are in line with the seven percent inflation projected by
the Reserve Bank of India (RBI).
Majority of the respondents
(over 80 percent) expect both domestic and international investment
either to increase or remain unchanged during 2012-13.
Almost
half of the respondents expect domestic investment to pick up as
compared to 43 percent in case of international investment.
Additionally, 75 percent of the respondents believe capacity utilisation
will either increase or remain unchanged in 2012-13.
India's economic growth may fall below 6%
