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Indian corporate leaders betting on sharp economic rebound
Monday, 10 November 2003, 20:30 IST
NEW DELHI: A majority of Indian corporate leaders are bullish about a sharp economic recovery in the current fiscal on the back of improved industrial activity and consumer demand, says a new survey.
"Corporate India is bullish on all fronts especially the country's economic performance," said the July-September quarter Business Confidence Survey of the Federation of Indian Chambers of Commerce and Industry (FICCI).
The performance of the heavy industry has improved significantly, added the survey, released Sunday.
The return of the "feel good factor" in the economy had also boosted industry mood, it said.
The survey was conducted among 564 Indian companies covering a wide spectrum of industrial sectors and with a turnover ranging between 
10 million and 100 billion.
The sectors covered include pharmaceuticals, textiles, telecom, food and beverages, heavy equipment and machinery, financial services, IT, travel and tourism, auto and auto ancillary, steel, cement and petrochemicals.
The sentiment of Indian industry, as measured by FICCI, is up by 6.9 percent over July-September quarter of fiscal 2002-03.
A whopping 90 percent of the respondents rated the overall economic conditions to be "moderately to substantially" better than in the last six months.
The Reserve Bank of India (RBI), the country's central bank, Monday said the Indian economy would grow between 6.5 and 7 percent in the current fiscal, helped by a sharp increase in farm output.
The Indian economy grew a moderate 4.3 percent in the year ended March 31, 2003, mainly due to a 3.1 percent fall in agricultural output, as the worst drought in three decades ravaged large parts of the country.
According to the survey, there has also been a remarkable improvement in domestic consumer demand and weak consumption is much less a concern now than it was a year ago.
Eighty percent of the survey respondents voted favoured more bilateral free trade agreements similar to the one India recently signed with Thailand.
On the rise in the value of Indian rupee against the U.S. dollar, 46 percent respondents felt the appreciating rupee is impacting on Indian exports.
"Interestingly, of the 46 percent who seemed concerned about the rupee exchange rate movement, about 48 percent want the RBI to intervene and slow down the rupee's upward movement," said the survey.
The majority of business leaders also feel the performance of most of the industrial sectors would be moderately to substantially better in the next six months.
"The heavy industry is most upbeat about its current performance and is followed by services and the light industry," said the survey.
A decline was, however, observed in the services sector for the next six months from 91 percent to 79 percent due to the appreciating rupee that has impacted on companies from sectors like IT, travel and tourism, and hospitality.
Riding on the back of buoyant consumer demand, 75 percent of the survey respondents expect higher sales in the coming six months.
A quarter of the respondents, however, pointed out that high cost of credit was acting as a deterrent in the growth of businesses.
"This has two implications. Firstly, there is scope for further reduction in the interest rates and secondly, benefits of the soft interest rate regime should be passed on to even the small and medium enterprises," said the survey.
Source: IANS
10 million and 100 billion.
The sectors covered include pharmaceuticals, textiles, telecom, food and beverages, heavy equipment and machinery, financial services, IT, travel and tourism, auto and auto ancillary, steel, cement and petrochemicals.
The sentiment of Indian industry, as measured by FICCI, is up by 6.9 percent over July-September quarter of fiscal 2002-03.
A whopping 90 percent of the respondents rated the overall economic conditions to be "moderately to substantially" better than in the last six months.
The Reserve Bank of India (RBI), the country's central bank, Monday said the Indian economy would grow between 6.5 and 7 percent in the current fiscal, helped by a sharp increase in farm output.
The Indian economy grew a moderate 4.3 percent in the year ended March 31, 2003, mainly due to a 3.1 percent fall in agricultural output, as the worst drought in three decades ravaged large parts of the country.
According to the survey, there has also been a remarkable improvement in domestic consumer demand and weak consumption is much less a concern now than it was a year ago.
Eighty percent of the survey respondents voted favoured more bilateral free trade agreements similar to the one India recently signed with Thailand.
On the rise in the value of Indian rupee against the U.S. dollar, 46 percent respondents felt the appreciating rupee is impacting on Indian exports.
"Interestingly, of the 46 percent who seemed concerned about the rupee exchange rate movement, about 48 percent want the RBI to intervene and slow down the rupee's upward movement," said the survey.
The majority of business leaders also feel the performance of most of the industrial sectors would be moderately to substantially better in the next six months.
"The heavy industry is most upbeat about its current performance and is followed by services and the light industry," said the survey.
A decline was, however, observed in the services sector for the next six months from 91 percent to 79 percent due to the appreciating rupee that has impacted on companies from sectors like IT, travel and tourism, and hospitality.
Riding on the back of buoyant consumer demand, 75 percent of the survey respondents expect higher sales in the coming six months.
A quarter of the respondents, however, pointed out that high cost of credit was acting as a deterrent in the growth of businesses.
"This has two implications. Firstly, there is scope for further reduction in the interest rates and secondly, benefits of the soft interest rate regime should be passed on to even the small and medium enterprises," said the survey.
Source: IANS