CII calls for comprehensive economic revival package
New Delhi: Cautioning that growth rate in the current fiscal may fall below 6.5 percent, industry chamber CII has called for a comprehensive economic revival package to improve industry sentiments.
According to CII snap poll results, there are clear indications of deteriorating business sentiments and worsening economic scenario.
The chamber said the poll was conducted in diversified sectors, including finance, manufacturing and ITeS, covering more than 100 industry leaders.
The results revealed that majority of corporate heads are expecting their companies' top line and bottom line growth to decline in this fiscal, while few of them think that it would be in a negative territory due to slowdown in the economy.
"About 57 percent of corporates are expecting their companies' bottom line growth to either stagnate or to decline in this fiscal," the poll said.
As many as over 40 percent of the respondents said their companies' net sales growth are likely to remain stagnate or decline during 2012-13, it added.
To boost global investors' confidence and attract more investments, CII Director General Chandrajit Banerjee said, "There is a need to open up the economy by allowing FDI in multi-brand retail and relax FDI limits in civil aviation."
To make borrowings cheaper and improve industry sentiments, CII sought an immediate cut in repo rate and cash reserve ratio (CRR) by at least 100 basis points from RBI.
The central bank is scheduled to announce its first mid- quarter review of monetary policy for 2012-13 on June 18.
In its annual credit policy for 2012-13 on April 17, it had slashed short-term lending rate or repo rate by 0.50 percent to 8 percent to prop up the economy.
Hit hard by global woes and domestic problems, India's economic growth rate slowed to a nine-year low at 6.5 percent in 2011-12.
On corporates expansion plans, CII said, majority of respondents said their investment plans to expand domestically may be at the same level as compared to the last year.
However, it said, a major chunk of respondents said they would increase their investments abroad.
"This clearly shows lower business sentiments domestically and the urgent need to improve the investment climate in the country," it said. The industrial growth shrank to 3.5 percent in March compared to same period last year.
Further, the poll said, about 50 percent corporates said hiring plans in their companies may remain stagnant.
Therefore, the chamber said the government needs to take urgent actions, including implementation of large projects to revive the economic growth.
India's economy is estimated to grow by 7.6 percent in the 2012-13.