Industry optimistic of revival in FY10: Survey

New Delhi, Nov 8 : After reeling under the impact of global slowdown over the last one year, the Indian industry is now hopeful for its revival during the current financial year, as it has started showing signs of improvement in the recent months.

Nearly 90 per cent of companies surveyed by PHD Chamber are optimistic of industrial revival during 2009-10, indicating that the economy is on the path of recovery and units could expect better times ahead. The survey had 186 responses.

Respondents feel that a modest recovery is on the anvil, spurred mainly by the stimulus package, which would have a positive impact on demand and would further lift sentiments during the next six months.

A majority of 51 per cent respondents 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.

Around four 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 seven per cent expect negative growth in commercial transactions in the next six months.

''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,'' chamber President Satish Bagrodia said.

Besides, infrastructure bottlenecks need to be addressed and skill development initiatives should be taken on a priority basis, he added.

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.

Howwever, the other problems include low consumer spending, rising exchange rates, revival of labour problems, infrastructure deficiency, deficient monsoon, unrealistic government policies and lack of political consensus on reforms.

Some policy suggestions made by the chamber include: --Bring decision making by government officials / departments on a fast track; --Augment public investment in infrastructure like roads, ports and inland air connectivity to revive the economy; --Ensure early completion of various components of the national highway development projects; --Waive royalty, stowing excise duty, Paryavaran Upkar, Vikas Upkar and Central Sales Tax on Coal supplied by Coal India Ltd to captive power plants (CPP).

--Move towards an Indian Common Market by abolishing local taxes like entry tax in some of the states.

--Enhance public investment in agriculture for improving infrastructural facilities especially at post harvesting stage by introducing mechanised drying and storage of crops which would help farmers to get better price for the crop and prevent deterioration of grain after harvesting.

--UNI

(c) 2009 Published with permission from United News of India.
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