CEO’s snap poll suggests 50% reduction in bank rate

The industry continues to expect double-digit growth in the current fiscal. “While 70 per cent of respondents are looking forward to growth rates between 10-30 per cent, 9 per cent are expecting growth rates above 30 per cent,” it said adding that 42 per cent respondents said, their profit will remain between 10-30 per cent,” CII said.

The capital goods industry has shown signs of revival and has grown by 5 per cent during April-July 2002. “This is a welcome contrast to the negative growth rate posted by the sector in the previous fiscal,” it said.

While there was little doubt that the weak monsoons would prove to be a drag on the overall growth of the economy, the majority of the respondents said that the deviation in the GDP growth rate of the current fiscal, due to deficient rainfalls, would be well under one per cent mark.

Respondents expressed concerns on the increasing prices of crude oil, a consequence of the growing uncertainties in the Gulf region. About 73 per cent CEOs said, “If the current trend of high international prices of petroleum continues, there will be a significant impact on the country’s trade balance.”

Concerns have been expressed on the continuous appreciation of the rupee against the dollar. Over 75 per cent CEOs said that the stronger rupee would have only a moderate impact on the growth prospects of India’s exports.

On the disinvestment front, 60 per cent of the respondents said that the recent postponement of the disinvestment in the public sector oil companies would have an adverse impact on the market sentiments. Suggesting a way out from the deadlock in the disinvestment process, the respondents emphasised that the government should shift its immediate focus on to smaller PSUs. “This would ensure that the reform process was not brought to a standstill, while the deadlock on the privatisation of oil sector PSUs was being resolved,” it said.