New Delhi, Dec 20 (Mayank Nigam) The rebound in the Indian economy bolstered by public spending, timely interventions to boost liquidity and reforms is expected to sustain over the next few months, equipping India well enough to close this fiscal with a GDP growth in the range of 9 to 10 per cent or even more, a CII poll of 100 CEO who are members of the industry body’s National Council shows. The poll reflected growing concern over the impact of the new Covid variant Omicron on business, with 55 per cent of the CEOs expecting that services sector would get adversely impacted due to the spread of the new variant and another 34 per cent of the CEOs accepting that the spread of the new variant would adversely impact manufacturing activities.
Moreover, 71 per cent of the CEOs polled did not raise resources in the Indian or global markets in the past year compared to only 18 per cent of them who raised debt and just 11 per cent who indicated that they had raised equity in the Indian or global markets in the past year. The CEOs representing some of India’s largest companies and sectors cutting across manufacturing, services and financial sector, indicated that the economy is set for a strong rebound in 2021-22 pushed by bold reforms, with 56 per cent of the CEOs optimistic about growth in the range of 9 to10 per cent and another 10 per cent expecting a faster pace of growth of more than 10 per cent this fiscal year. “Production Linked Incentives scheme, RoDTEP and several other bold reforms have buoyed the optimism on higher economic growth,” said TV Narendran, President, CII. Interestingly, the CII poll results find resonance in a recent International Monetary Fund (IMF) forecast which has kept India’s growth forecast for 2021-22 unchanged at 9.5% as well as in Asian Development Bank outlook which expects India to grow 9.7% in this fiscal year ending 31 March 2022.
Notwithstanding supply chain bottlenecks hampering movement of goods in their industry sector, respondents were upbeat on sentiments regarding their business, with 35 per cent of the CEOs indicating that the increase in revenue this year may be in the range of 10 to 20% when compared to pre-covid year (2019-20), while another 33 per cent expected a bigger jump in revenues of more than 20 per cent increase when compared to the pre Covid year. On gross profits front, 35 per cent of the CEOs polled saw more than 20 per cent increase in gross profits when compared to the pre Covid year, while another 17 per cent indicated an increase in growth of profits by 10 to 20 per cent. Given the pick-up in business activity this year, 59 per cent of the CEOs noted that capacity utilization in their companies was currently in the range of 70-100 per cent, while 18 per cent of them felt that the current capacity utilization would be more than 100 per cent. Nearly 62 per cent of the CEOs projected capital expenditure in their companies for the year 2022-23 to be upto Rs 500 crore. On expected growth in exports, 35 per cent of the CEOs polled indicated upto 20 per cent increase in exports when compared to pre Covid year 2019-20, while 24 per cent of them indicated that the exports would remain the same as in FY20. Interestingly, about 10 per cent of the CEOs indicated more than 50 per cent growth in exports in their companies in the current year when compared to the pre Covid year 2019-20.