Financial Daily from THE HINDU group of publications
Monday, Jan 28, 2002
Financial Daily from THE HINDU group of publications Monday, Jan 28, 2002 |
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Industry & Economy
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Economy Economic growth likely to be below 5 pc: CEO poll Our Bureau
NEW DELHI, Jan. 27 THE current fiscal is likely to end with an economic growth of less than five per cent, although during 2002-03 a minor revival in growth is likely, a majority of Chief Executive Officers (CEOs) has told the Confederation of Indian Industry (CII). A snap poll conducted by CII shows that the CEOs expect the GDP growth during 2002-03 to be between five and 5.5 per cent. On the manufacturing sector, a majority of CEOs expressed the opinion that the revival of fortunes of the sector was still about a year away. The reintroduction of investment allowance in the forthcoming Budget, the CEOs felt, would be the most important measure that the Government could take to give a boost to the manufacturing sector. The reintroduction of investment allowance combined with a further reduction in interest rates by the Reserve Bank of India could potentially revive the "spirit of investments" in the economy, several CEOs felt. A step-up in public sector investments would help spur demand, they felt. Fiscal incentives and procedural simplification for corporate restructuring were other critical measures that the CEOs were looking forward to. Anticipating hectic restructuring activity in the tough and fiercely competitive times ahead, a majority of the CEOs felt that any measure to simplify the fiscal structure for corporate restructuring would significantly affect their companies. The CEOs also felt that with the financial infrastructure under the purview of the Finance Ministry, the Budget can drive future reforms in the financial sector, particularly in the banking system. A majority supported the measures to move ahead with the setting up of Asset Reconstruction Companies (ARCs) to clean up the NPAs in the banking system. On the indirect tax front and lowering of import tariffs, the poll showed that there were two distinct blocks among Indian industry - those who believed that the time was right for lowering of import tariffs and those who were against it. There were also two views on whether Indian should move towards a single rate of duty by 2004-05. The poll showed that those favouring lowering import tariffs to bring them in tune with ASEAN levels also subscribed to the view that soft international oil prices and the dismantling of APM were reasons enough to go ahead with lowering of the import duties. Those against the move felt that indigenous manufacturers needed more time before being exposed to international competition.
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