Indian economy is set for a strong rebound in 2021-22, with a majority of CEOs (56 per cent) polled by the Confederation of Industry (CII), indicating that this fiscal’s economic growth would be in the range 9-10 per cent.
Another 10 per cent of the CEOs polled expect the economy may grow at a faster pace of more than 10 per cent this fiscal year, according to the recent CEOs Poll conducted among members of the CII National Council.
“Government’s strong emphasis on public works, timely interventions to boost liquidity and several reforms carried out in the recent months including easing regulations, Production Linked Incentives scheme, RoDTEP and several other bold reforms have buoyed the optimism on higher economic growth”, said T V Narendran, President, CII.
The respondents were also upbeat on sentiments regarding their business, with 35 per cent of the CEOs indicating that the increase in revenue this year may be in the range of 10 to 20 per cent when compared to pre-covid year (2019-20), while another 33 per cent of the CEOs indicated expectations of a bigger jump in revenues (more than 20 per cent increase when compared to the pre-Covid year).
When asked about the impact of the new Covid Variant – Omicron on business, 55 per cent of the CEOs polled expects that the services sector would get adversely impacted due to the spread of the new variant. In comparison, another 34 per cent of the CEOs indicated that the spread of the new variant would adversely affect manufacturing activities.
Supply chain problems
On gross profits front, 35 per cent of the CEOs polled indicated more than 20% increase in gross profits compared to the pre-Covid year, while another 17 per cent indicated an increase in profits growth by 10 to 20%. This optimism among the CEOs is despite more than a third of them (70 per cent) observing that supply chain bottlenecks were causing problems in the movement of goods in their industry sector.
Capacity utilisation
Further, given the pick-up in business activity this year, 59 per cent of the CEOs noted that capacity utilisation in their companies was currently in the range of 70 per cent to 100 per cent, while 18 per cent of them felt that the current capacity utilisation would be more than 100 per cent. Nearly a similar proportion (62 per cent) of the CEOs polled projected capital expenditure in their companies for the year 2022-23 to be up to ₹ 500 crore. Additionally, 71 per cent of the CEOs surveyed indicated that they did not raise resources in the Indian or global markets in the past year. In comparison, 8 per cent of them stated that they had raised debt, and another 11 per cent indicated that they had raised equity in the Indian or global markets in the past year.
Exports prospects
On expected growth in exports, 35 per cent of the CEOs polled indicated up to 20 per cent increase in exports compared to the pre-Covid year 2019-20, while 24 per cent of them showed that the exports would remain the same as in FY20. Interestingly, about 10 per cent of the CEOs indicated more than 50 per cent growth in exports in their companies in the current year compared to the pre-Covid year 2019-20.
Furthermore, 36 per cent of the CEOs indicated that their exports to East and South-East Asia are increasing at the fastest pace, while 22 per cent of them noted that North America contributed to their increase in exports and another 20 per cent of the CEOs indicated that Europe accounted for the significant increase in exports.
On the imports front, 73 per cent of the CEOs indicated that less than 10 per cent of their imports came from China, while another 22 per cent of the CEOs polled indicated share of their imports from China to be in the range of 10 to 25 per cent.
Source : The Hindu Businessline
