India's Economic Growth May Fall Below 6 Percent: CII

New Delhi: 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.