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| India Inc optimistic about economic situation in next 18 months |
| Press Trust of India / New Delhi Jun 11, 2009, 18:28 IST |
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Corporate India is optimistic about improvement in the country's economic situation in the next 18 months and believes developing nations will become more powerful as a fallout of the global slowdown, a survey says.
According to a survey by the All India Management Association (AIMA), at a time when the global economy is experiencing the deepest downturn in 50 years, Indian managers are still showing optimism towards both the global and Indian economy.
As many as 61 per cent of Indian managers are bullish about the economy, while just about 7 per cent are pessimistic about the situation in the coming months, the survey said.
"With the stable government in power again, reforms will be unstoppable. 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," AIMA Research Committee Chairman BS Sahay said.
Despite higher optimism for the economy, about 35 per cent of those surveyed feel that economic recovery in India and rest of the world would not be too spaced out.
Further, almost half of the respondents felt that liquidity crunch was the major problem facing corporate India. This reflects the fact that the domestic economy is not isolated from the global market.
As per the survey conducted among 450 middle-level managers across sectors such as pharmaceuticals, 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.
Besides the US, BRIC countries, especially India and China, would be the primary growth drivers in the global recovery, it added.
The survey also showed that among the respondents, managers working with public sector companies were more optimistic about the economy than their private sector peers.
While most private companies are trying to minimise risk by pulling back investments, public sector firms are taking steps to bring down operational expenses.
Further, managers believe the world economy has had a limited impact on Indian economy, pulling down the estimated GDP growth rate of India in 2009 to 4.5 per cent.
The survey was done in all the major metros of the country — New Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bangalore, Pune and Ahmedabad.
It covered middle management executives aged between 28-45 years working in private companies including MNCs and PSUs.
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