The wave of economic reforms announced by the UPA government should come as tonic to Corporate India as the results of the CEO Speak survey, conducted by Hindustan Times in partnership with research agency MaRS, show how pessimistic the company honchos had become.
Nearly two-thirds (65%) of the 51 CEOs polled felt that the growth this fiscal may be below 6%, a marked deterioration from the last survey in March, when 52% of the senior decision makers had pegged growth expectations for 2012-13 at less than 7%.
The CEOs were surveyed in a three-week period before the UPA government announced the reforms, which were met with approval from corporate India.
In a similar poll last October, only 19% of CEOs surveyed said that the achieved GDP growth in 2011-12 would be less than 7%, while 38% expected the growth to be above 7.5%.
The reasons for their sentiment range from high inflation that has kept interest rates up, environmental clearances not being granted and a general sense of ‘policy inertia’ within the government.
But the recent measures —including foreign investment in multi-brand retail, raising diesel prices and capping the availability of cheap LPG cylinders — are expected to pacify jittery CEOs.
“If you had asked me a week or two ago, I would have had a pessimistic outlook because nothing was moving. But if the government continues the slew of measures it has put together, the confidence will grow, investments will come, employment will be generated and we will be back to comparing our performance with China and other BRIC countries,” said Harsh Goenka, chairman, RPG enterprises.
“Our economy is at a point when we need to usher in a series of reforms to see an improvement in overall performance. The reforms measures announced are welcome, but we need more of the same,” said Sidharth Birla, vice-president, FICCI.