A CEO Snap Poll conducted by the Confederation of Indian Industry (CII) has revealed that 72 percent of 70 respondents are confident of India posting over six percent economic growth during 2003-04 and 2004-05, the leading industry lobby said in a statement Sunday. "The poll has revealed that the majority of the respondents were upbeat about the overall performance of the economy and believed that the Indian economy would post two consecutive years of growth above six percent," it said. "For the current fiscal year the majority (72 percent) stated that GDP growth would be above 6.0 percent and the remaining 28 percent believed that GDP growth would be between 5.0-6.0 percent. "For the next financial year 63 percent of the respondents stated that GDP growth would remain above 6.0 percent and 37 percent felt that it would be between 5.0-6.0 percent," the statement added. The need for continuing with the reform process in the current fiscal year has been stressed by the CEOs. They have stated that in order to maintain the current upswing in the performance of the economy, it is important that the reform process retained its momentum. Topping the wish list of CEOs is the implementation of value added tax, which has fallen a casualty to political divide under pressure from the trade lobby. Similarly, CEOs' keenness on the government continuing with privatisation of the identified state-run companies "to ensure sustainability of the economic upswing in the long run" seems likely to remain a casualty to political mood swings. Third on the wish list of fiscal reforms were state-level reforms, particularly state power utilities. The other measures for greater fiscal prudence sought are pension reforms, restructuring of the Food Corporation of India and fixing a ceiling on the issue of guarantees given by central and state governments to various projects. Another significant concern revealed by the respondents of the snap poll was the rapidly appreciating rupee exchange rate. Over 62 percent respondents felt that the Reserve Bank of India should intervene immediately to control the rise of the rupee against the dollar. On the forex reserves, which have swollen to $84.9 billion, CII feels that such large amounts cannot be accounted for by current account inflows or long-term debt and equity inflows or revaluation of reserves. About 37 percent of the respondents attributed the scorching pace of increase in the forex reserves to an increase in investments by the Foreign Institutional Investors (FII) investments, while 34.45 percent felt that it was due to greater deposits by non-resident Indians and 28.6 percent said that it was a result of an increase in remittances. However an overwhelming 91.4 percent of the respondents said that a significant amount of interest rate arbitrage was occurring in the country. On the growth prospects for their individual companies in the current fiscal year, 45.7 percent of the respondents stated that they expected growth of between 10-20 percent, while 31.4 percent expected higher growth of between 20-30 percent, 8.5 percent expected still higher growth 30-50 percent and three percent over 50 percent growth for their company in the current fiscal. Only 11.4 percent respondents felt that growth would remain below 10 percent. Commenting on whether the higher sales would get translated into higher profits, 40 percent of the respondents expected 10-20 percent growth in profits, while 17 percent respondents expected 20-30 percent rise and 20 percent in the range of 30-50 percent. Of the remainder nine percent are looking forward to profits exceeding 50 percent, while 14 percent were not optimistic of even 10 percent profits.
Source: IANS