By IANS,
New Delhi : Indian business leaders feel economic growth in 2008-09 will not surpass 7.6 percent, a survey report released by an apex Indian industry body Friday said.
Giving the thumbs down to the economic outlook on high inflation and hardening interest rates, as much as 77 percent of the 350 chief executives (CEOs) surveyed by the Assocham Business Barometer (ABB) said they did not expect growth to surpass 7.6 percent, a statement by the Associated Chamber of Commerce and Industry (Assocham) said.
With double digit inflation coupled with tight monetary policy leading to increased interest rates and input costs, the ABB has revised its April gross domestic product (GDP) projections from 7.9 percent southwards to 7.6 percent.
The CEOs feared that the Reserve Bank of India (RBI) could take further steps with revision in interest rate if domestic inflation continues to remain in double digits, the statement said.
The ABB found that industry leaders feared economic growth would moderate in view of rising prices of fuel and manufactured goods, reduced consumer demand, global economic slowdown and negative sentiments in stock markets.
Sixty-five percent of the business heads felt the economy was doubly hit with high inflationary pressures caused by simultaneous increase in energy and commodity prices and tightening money situation, the survey said.
“Overall growth in the GDP would have been even lower had agriculture and export driven sectors not been registering impressive growth, and it is due to them that the economy would still be able to put up a decent performance with 7.6 percent growth in fiscal 2009,” Assocham president Sajjan Jindal said in the statement.
According to the ABB, agriculture will grow at four percent, services sector at nine percent and industry at 7.2 percent, resulting in an overall growth rate of 7.6 percent.
About 72 percent of the respondents were of the view that industry could witness a moderate growth rate of 7.2 percent in the 2008-09 fiscal year, as against 8.7 percent the previous fiscal on account of sharp rise in input costs, lower demand, huge interest bills and global slowdown.
Manufacturing, which accounts for a share of 15.5 percent in the total GDP, witnessed a slowdown to 5.3 percent in April-May this fiscal from 12.7 percent in the same period last year.