Pramugdha Mamgain, New Delhi, June 8, 2009
The Economic Times
India Inc expects the country to be back on the growth track in the next 18 months and third-world countries to become more powerful as a fallout of the global economic slowdown, a survey by research firm IMRB International reveals.
The survey commissioned by All India Management Association (AIMA) showed that nearly two-third of the managers, who took part in the survey, were bullish about India’s economic growth and believed that India Inc will bounce back with renewed profits.
As per the survey conducted among 450 middle-level managers across sectors such as pharma, automobile, energy and power, telecom and IT, the respondents blamed the sub-prime crisis in the US and weak corporate governance as the main causes of slowdown.
Low sentiment brought down the consumer expenditure although there has not been a steep decline in income levels. Consumer spending has come down, mainly in lifestyle. While the spending on children and food products has gone up, there has been no significant change in the spend on automobile and household durables, the survey said.
“With a stable government in power again, reforms will be unstoppable. A special focus should be laid on employment generating projects and increasing money flow in the economy, besides reducing taxes to bring back both consumers’ and investors’ confidence,” said AIMA’s research committee chairman BS Sahay.
The optimism was higher among managers in the pharmaceutical, telecom, IT/ITeS and textile sectors, while it was low in automobile and financial services. Almost half of the respondents felt that liquidity crunch is the major problem facing corporate India. Despite higher optimism towards the Indian economy, around 35 percent of those surveyed believe that economic recovery in India and elsewhere will not be too spaced out.
This reflects the fact that Indian economy is not isolated from the global market. Besides the US, BRIC countries, especially India and China, will be the primary growth drivers in the global recovery, according to the survey.
Managers working with public sector companies were more optimistic about the economy than their private sector counterparts, the survey revealed.
While most Indian private companies are trying to minimise risks by pulling back investments and cutting costs, public sector firms are taking steps to bring down operational expenses.
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