Stronger India after slowdown: Survey

Stronger India after slowdown: Survey
The Economic Times, June 8, 2009, Page 7

Pramugdha Mamgain NEW DELHI

INDIA Inc feels that the country will be back on growth track in the next 18 months and that the third world countries will become more powerful as a fallout of the global economic slowdown, as per a survey of research firm IMRB International.

The survey commissioned by All India Management Association (AIMA) showed close to 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 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.

Low sentiments has brought down consumer expenditure due to the sense of job insecurity despite the fact that there has not been a steep decline in the income levels. Consumer spending has declined mainly in lifestyle. While spend on children and food products have gone up, there has been no significant change in spend on automobile and household durables, 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,” said AIMA’s research committee chairman BS Sahay.

The level of optimism was higher among managers in pharmaceutical, telecom, IT/ITeS and textile sectors while it was low in automobile and financial services sector.

Almost half of the respondents felt that liquidity crunch is the major problem facing corporate India. Despite higher optimism for Indian economy, around 35% of those surveyed believe that economic recovery in India and the rest of the world 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, as per the survey.

Among the respondents, managers working with public sector companies were more optimistic about the economy than their peers in the private sector, 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.