The Hindu Business Line : CEOs see GDP growth of over 6 pc: CII poll

FOR the second successive year the economy is likely to post a gross domestic product (GDP) growth in excess of 6 per cent during the current fiscal year.

This has been indicated by a majority (72 per cent) of chief executive officers who participated in a snap poll conducted by the Confederation of Indian Industry (CII).

In a statement, the chamber has said that the respondents to the poll have stressed on the need to continue the reforms process in the current fiscal adding that in order to maintain the current upswing in the performance of the economy it was important that the reforms process retained its momentum.

The statement adds that implementation of the value-added tax (VAT) and disinvestment of the identified public sector undertakings (PSUs) were identified as the two top fiscal measures required to ensure sustainability of economic reforms in the long run. Besides, the importance of State-level reforms being carried out, particularly the restructuring of the State electricity boards, also ranked high on the list of priorities of the respondents.

The respondents also listed the rapid appreciation of the rupee exchange rate as an area of significant concern. A majority of the respondents (62.8 per cent) felt that the Reserve Bank of India should intervene to check the rise of the rupee against the dollar.

When questioned about at what stage the RBI should intervene to check the appreciation of the rupee, a majority (68.2 per cent) felt this should be done immediately, while 23 per cent felt that the central bank should intervene only if the exchange rate rises to Rs 45 to a dollar.

On the issue of why the foreign exchange reserves had been rising so rapidly, 37 per cent of the respondents felt that it was due to an increase in FII investments, while 34.45 per cent felt that it was due to greater non-resident Indian (NRI) deposits.

When questioned on the growth prospects of their individual companies during the current fiscal, a majority of the respondents (45.7 per cent) said they expected growth to be between 10 and 20 per cent, while 31.4 per cent said that growth would be between 20 and 30 per cent.

However 11.4 per cent felt that growth would remain below 10 per cent, while 8.5 per cent said that growth would be between 30 and 50 per cent. A small minority (3 per cent) of the respondents felt that their company would grow by more than 50 per cent during the current fiscal.

Commenting on whether higher sales will translate into higher profits, the majority of respondents (40 per cent) said that growth in profits would be between 10 and 20 per cent, while 17 per cent said that profits would grow by 20-30 per cent.

Among those who participated in the CEO poll included the CEO, Reddy's Laboratories, Mr G.V. Prasad; the Managing Director, Maruti Udyog Ltd, Mr Jagdish Khattar; the Chairman, Ashok Leyland Ltd, Mr R.J. Shahaney; the Vice-Chairman and Senior Managing Director, SRF Ltd, Mr Arun Bharat Ram; and the Managing Director and President, Ford India Ltd, Mr David Friedman.

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