While being “cautiously optimistic” about the economic growth in the country, 67% of the CFOs of leading industrial houses feel that the growth in next fiscal (2013-14) will be less than 6%.
In the same breath, the industry also mentions that corruption and bureaucracy are among the “big concerns” for the industry.
According to a survey of 32 chief financial officers by the Confederation of Indian Industry (CII) and McKinsey & Co, over 50% respondents felt that the Euro crisis, followed by slowdown in the US and increasing oil prices are expected to have the biggest impact on the Indian economy in the next fiscal. “About 67% of the respondents believe that India’s GDP growth in the coming year will be less than 6%,” a CII statement said. Recently, finance minister P Chidambaram had hinted a lower growth in the coming times saying that the GDP growth in the second half of the current fiscal would be between 5.5 and 6%. The growth rate during the first quarter of the current fiscal was 5.5%. In the Budget for 2012-13, the then finance minister Pranab Mukherjee had projected the economy to grow by 7.6 (+/- 0.25)%. Recently, the Reserve Bank, in its half yearly review of the monetary policy had sharply lowered this fiscal's economic growth projection to 5.8%, from 6.5% estimated earlier.
This was done in the view of global and domestic factors like poor investments and subdued demand. Also, the CFOs called for transparency in governance with a zero tolerance for corruption. “India now has dubious distinction of being amongst the most corrupt governments in the world,” the survey said. The response on corruption gains significance in the light of ‘exposes’ being made by the social activists’ group India Against Corruption led by Arvind Kejriwal. Kejriwal has in recent weeks alleged accumulation of Black Money against some of the largest corporate in the country along with highlighting instances of corruption in political as well as business spaces. Besides, appreciating the recent reform measures taken by the government, the survey said that the key enablers to fuel the economic growth include increased FDI, reduced fiscal deficit and enabling corporate growth. Further, 52% of the CFOs said that General Anti-Avoidance Rules (GAAR) is a step in the wrong direction. Also, over 80% CFOs said they expect their company's top line growth to be same this year compared to the last year. CFOs from leading Indian companies across sectors including manufacturing, information technology, services, consultancy and financial services were part of the survey, the CII statement said.