Economy may by 8.3% in FY11: D&B

The Indian economy seems to have a strong foothold on the recovery path backed by timely and aggressive policy responses by the Government and the RBI to tackle the crisis and a turnaround in consumer as well as business sentiment. However, some downside risks in the form of inflation, concerns regarding double dip recession in some developed economies etc. do persist. 

In a dynamic economic environment it becomes imperative for businesses to track the macroeconomic performance on an ongoing basis. D&B's report Economy Outlook 2010-11 is intended to facilitate more informed decisions by the businesses and also enable investors to assess the degree of business confidence and potential for India's economic growth. The report provides forecast of key macroeconomic variables, which will determine the course of the business environment over the next fiscal. 

The report also includes Sectoral Outlook for 2010-11, which is a survey based analysis covering expectations of a sample of companies panning the manufacturing and services sector, to gauge their business optimism for the forthcoming year. It highlights the key issues and concerns that business leaders have regarding future business prospects, and enunciates the growth drivers and strategic focus of various sectors. 

The survey shows that companies across the sectors are highly optimistic with regard to demand conditions in FY11, with as many as 90% of the respondents from the manufacturing sectors expecting an increase in their sales volume as well as new orders received. Within the sectors the automobile sector is highly optimistic with regards to volume of sales with as many as 96% of the respondents anticipating increase in their sales volume. 

Overall optimism regarding profit expectations remained healthy with 79% of the respondents from the manufacturing sector expecting an increase in their net profits during FY11. The cement sector is highly optimistic with 85% of the respondents anticipating their net profits to increase. The year 2010-11 is likely to bring cheer for job seekers as a large majority of the respondents from both manufacturing as well as services sector foresee an increase in headcount. 

“The increase in optimism about the growth prospects of the Indian economy has been very evident in the past few months and is here to stay. We expect GDP growth to be around 8.3% during FY11 backed by strong investment as well as consumption demand. The Industrial sector is expected to play a crucial role in driving the growth in GDP during FY11. IIP growth is expected to remain robust at 10.3% during FY11. Focus on infrastructure spending by the government and an increase in investment demand by the corporate along with improved consumption would provide impetus to the industrial production. We expect investment rate to increase to 37.3% during FY11. Nonetheless, elevated commodity prices do remain a major concern and if unaddressed could pose a threat to the economic growth prospects. With inflation expected to remain at double digit levels in the first few months of FY11, the RBI might take some measures aimed at arresting the mounting inflationary pressure, though in a calibrated manner without affecting growth,” said Yashika Singh, Head, Economic Analysis, Dun & Bradstreet India. 

 

 

 

 

 

 

 

 

 “The results of the sector survey conducted by D&B also reiterate the optimism existing in the business community. Almost 90% of the survey respondents from the manufacturing sector have anticipated an increase in their sales volume and order book position indicating their expectation of robust demand conditions,” she added.