New Delhi, Sept. 2: Surveys by leading business associations have laid bare industry concerns on growth.
The Federation of Indian Chambers of Commerce and Industry (Ficci) has developed a business confidence index, which is lower at 51.8 in the first quarter against 60.3 in the preceding quarter.
A study by the Confederation of Indian Industry (CII) shows 44 per cent of the respondents to its survey expecting GDP growth during 2012-13 to remain below 6 per cent. While no one expects it to cross the 7-per-cent mark, 44 per cent expect it to remain between 6 and 6.5 per cent.
The two reports have revealed that the current economic slowdown coupled with a negative growth in the employment prospects might force the economy into a “jobless de-growth”.
“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 6-6.5 per cent, while only 36 per cent expect it to lie between 6.5 per cent and 7.5 per cent,” the CII report stated.
“This reflects low confidence levels in the industry. The first quarter GDP growth at 5.5 per cent corroborates the fact that the slowdown is sustaining. 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,” said Chandrajit Banerjee, director-general CII.
Ficci said India Inc did not seem upbeat about the current performance and lacked optimism for the future at all three levels — economy, industry and firms.
“Weak demand continues to be a concern for the members of corporate India. Nearly 73 per cent companies reported weak demand to be a constraining factor. The corresponding figure in the last survey was 57 per cent and a year back, 56 per cent. Also, a significant proportion of participants in the current round indicated cost of credit to be a constraint,” the Ficci report stated.
According to CII’s poll, as many as 76 per cent of the respondents expect implementation of economic reforms to be delayed because of the general elections in 2014.
The industry is awaiting the implementation of reforms such as introduction of GST, rise in FDI cap in insurance and pension sectors, allowing FDI in multi-brand retail, containment of burgeoning fiscal deficit through reduction in subsidies and de-control of fuel prices.
Along with these, the industry has also emphasised on the need to simplify the process of getting approvals and faster clearances of projects.
Ficci said the deficient rainfall situation had a definite impact on the performance of various sectors. About 85 per cent of the respondents said the current drought situation would have an impact on their industry.