New Delhi: A majority of India Inc feels that Industrial recovery is just round the corner, a survey conducted by PHD Chambers found. Respondents were heartened by signs of revival and improvement in industrial outlook in recent months.
Most respondents gave credit to the govt stimulus package for the turnaround, saying that it would have a positive impact on demand and would further lift sentiments during the next six months. The survey had 186 responses.
According to the survey, an overwhelming 90 per cent of companies are hopeful of industrial revival during 2009-10 indicating that our economy is on the path of recovery and units could expect better times ahead.
A break up shows a majority of 51 per cent perceive that their business would grow by 5-20 per cent. Another 16 per cent display greater enthusiasm by predicting 21-50 per cent growth in the next six months. What is more, around 4 per cent, especially smaller companies, even envisage a growth rate of over 50 per cent. However, a significant 22 per cent are still doubtful about the extent of recovery and expect their business to grow at a modest 0-5 per cent while around 7 per cent expect negative growth in commercial transactions in the next six months.
There are still numerous challenges which could come in the way of a decisive economic recovery. Respondents were of the view that the two most pressing risk factors are the uncertain recovery of the global economy and the spectre of rising interest rates. Among the other problems included low consumer spending, rising exchange rates, revival of labour problems, infrastructure deficiency, deficient monsoon, unrealistic government policies and lack of political consensus on reforms.
“According to the Survey, the immediate focus of the Government should be to desist from introducing monetary tightening measures and retain fiscal incentives provided by way of stimulus packages to revive demand and increase private consumption expenditure. Besides, infrastructure bottlenecks need to be addressed and skill development initiatives should be taken on a priority basis”, said Mr. Satish Bagrodia, President, PHD Chamber.
Augmenting investment in infrastructure like roads, ports, inland air connectivity etc to revive the economy, pushing for an early completion of various components of the national highway development projects, moving towards an Indian Common Market by abolishing local taxes and enhancing investment in agriculture were some of the policy suggestions mooted by the Chamber.