AFTER-POLL SURGE IN BUSINESS CONFIDENCE: FICCI SUR 

New Delhi, Oct 30 :     This survey puts to rest whatever fears one may have had that the economy was not on track and that businessmen were not having rosy thoughts about the future. First, the Confederation of Indian Industry (CII) did a survey of businessmen which showed that a majority of them were confident of the future and raring to go. And now it is the turn of the Federation of Indian Chambers of Commerce and Industry (Ficci) to come out with findings that are almost identical. Ficci?s survey of 458 companies revealed that the business confidence index rose by 23.45 per cent after the formation of the new government, indicating that the challenge of globalisation could only be met by a stable government. More than 85 per cent of the respondents were hopeful of a recovery by the end of this fiscal. Around 60 per cent felt that sectors such as steel, cement, chemicals and capital goods would continue to look up. According to the Ficci study, more than 53 per cent felt that industrial growth this fiscal would be in the range of 4-6 per cent. Almost 86 per cent felt that the GDP growth this year would be between 5 and 6 per cent. This is a little below expectation, but most respondents felt that agriculture growth would not be high because of a not-so-good kharif crop and a high growth in the base period (last fiscal) which would pull down the growth percentage this fiscal. However, the respondents were optimistic that the manufacturing sector growth would be high enough to ensure a 5-6 per cent GDP growth despite a poor performance by the farm sector. Despite a hike in diesel prices, 42.4 per cent of the respondents felt the inflation rate would be between 2.5 and 3.5 per cent. They felt the Bombay Stock Exchange sensitive index would rally in the range of 4,500-5,000 points this fiscal. More than 53 per cent of the companies surveyed expect the prime lending rates to come down marginally and remain around the 12-13 per cent range this year. A similar number felt the rupee will remain stable, not dropping below 45 a dollar. On the negative side, those surveyed felt infrastructure bottlenecks, administrative hurdles, high lending rates and fiscal imbalance were the four main factors hindering economic growth. In a workplan for next year, industry felt that the prevention of money laundering Bill, companies Act and Insurance Regulatory Authority Act must be taken up in the first 90 days. The government should also push ahead with disinvestment of public sector units, introduce VAT, and tackle the thorny issue of rising non-performing assets of banks in 180 days. By the end of the year, it must start privatisation of PSU banks and restructure labour force.