Industry sees moderation in GDP growth: CII survey

Sep 12, 2011 |

Chandigarh

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With rising inflation coupled with spiraling lending cost becoming a bane, a majority of industry representatives surveyed do not see the economic growth at over 8 per cent mark for the current fiscal.

The survey of the industry across the northern region by CII revealed that 60 per cent of respondents do not see GDP to cross 8 per cent mark and 10 per cent respondents expect growth even lower than 7 per cent.

Painting a gloomy picture of the overall outlook of the economy, the survey also found that the industry reckons rising interest and surging input cost as top two concerns needed to be addressed soon.

CII, in its business outlook survey carried out for July- September period, highlighted that only 40 per cent of the respondents expect the economic growth to be more than 8 per cent compared to 62 per cent in its last survey for April and June 2011. "This reflects moderation in growth expectations in the current quarter," CII said.

On inflation front, the survey said that 87 per cent of the respondents expect inflation to be greater than 7 per cent.

The expectation is in line with high inflation and inflationary concern persisting in the economy.

The industry is also feeling that the pace of capital investment would also decline in the wake of increasing lending rates.

"Only 31 per cent of the respondents expect an increase in capital investment in the current three months as against 47 per cent in previous survey which indicates a likely moderation in the investment activity," it said.

"Rising interest rates have an adverse impact on the investment with 89 per cent of the respondents did not increase investment due to rising interest rates," the survey said.

The survey is based on responses received from industry across the northern region, including Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand.

The manufacturing sector represents 59 per cent of respondents, 36 per cent from the service sector.

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