Recovery to take time, growth may not touch 5% in FY14: Survey

Political uncertainty was ranked as the highest risk factor affecting the business confidence of India Inc, according to the CEO snap poll

The ongoing economic slowdown seems to have weighed down on the confidence of India Inc, with a majority of CEOs expecting a growth rate of below 5% in the current fiscal, according to a poll conducted by industry body CII.

"The CEO snap poll indicated that growth may not touch 5% in the current fiscal. Most of the respondents (42%) expected the economy to grow in the range of 4.5 to 5%," a CII statement said.

Indicating that economic revival will take time, 65% of the respondents said that they did not expect it before the second quarter of next fiscal.

With General Elections just a few months away, political uncertainty was ranked as the highest risk factor affecting the business confidence of India Inc, according to the poll.

Also, 82% of the respondents felt the value of rupee against US dollar was favorably affecting exports.

Further, a majority (53%) of the respondents expected the rupee to prevail below 62 per dollar by the end of the current fiscal with current account deficit easing.

Regarding the efficacy of the Cabinet Committee on Investment (CCI) in clearing large projects, 56% of the respondents did not feel the panel had raised investments so far at the ground level.

"There is a need for strengthening policy intervention to revive investment demand, both by the Government as well as RBI. The Government should focus on stepping up capital expenditure whereas RBI should adopt a softer monetary stance," CII Director General Chandrajit Banerjee said.

 Besides, indicating that the economy is moving towards a situation of stagflation, majority of the respondents (42%) expected inflation to increase moderately in the second half of the year.