Indian industry poised for double-digit growth: survey

Monday, 22 December 2003, 08:00 Hrs
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NEW DELHI: Indian industry is eyeing double-digit growth in sales and profits in the 2003-04 fiscal, with expectations of a fall in inflation and high economic growth, says a survey.

The latest Confederation of Indian Industry (CII) snap poll of CEOs says a majority are expecting their companies to register double-digit growth in sales in the current fiscal year.

Around 74 percent of CEOs stated that their company's sales would grow by over 10 percent in the financial year 2003-04, the CII said.

Of these, nine percent expected 40-50 percent growth, while four percent expected growth of over 50 percent.

Of the remainder, 35 percent expected growth in sales to be 10-20 percent, while 13 percent expected it to be 20-30 percent growth and another 13 percent expected growth of 30-40 percent.

Only 26 percent of the respondents expected growth in sales to be less than 10 percent.

As for growth in profits, 74 percent said it would be in two digits.

Four percent of the respondents expected it to be 30-40 percent, nine percent expected 40-50 percent and 22 percent expected the figure to be more than 50 percent.

Of the remainder, 26 percent expected growth to be around 10-20 percent and 13 percent expected it to be 20-30 percent.

As with growth in sales, only 26 percent of respondents expected growth in profits to be less than 10 percent.

On expectations regarding inflation, 43 percent of respondents said they expected inflation to remain between five and six percent for the remaining months of the current fiscal.

A sizeable 35 percent felt the inflation rates would fall and be between four and five percent, while 13 percent felt it would be between three and four percent. Only nine percent were optimistic of it falling to two to three percent.

The burgeoning fiscal deficit of state and central governments was identified as a serious impediment to sustainable growth in the economy, the CII stated.

When asked whether the target of a fiscal deficit of 5.6 percent of gross domestic product (GDP) would be achieved, the majority (74 percent) felt that the government would overshoot the figure.

With the economy on a high growth path, CII feels "there is an opportunity for the government to further enhance growth by bringing down the basic corporate tax rate to levels comparable to the corporate tax rate structure in our neighbouring countries".

On expectations from the budget on February 28, around 41 percent of CEOs felt the tax rate would be reduced to 30 percent, while the remaining 59 percent said it would remain unchanged at 35 percent.

The snap poll also revealed that the majority of respondents were upbeat about the overall performance of the economy, with 52 percent optimistic of the Indian economy posting a growth of over seven percent in the current fiscal.

For the 2004-05 fiscal, 30 percent stated that GDP growth would remain above seven percent, while 43 percent said it would be between 6.5-7.0 percent.
Source: IANS
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