The economic revival, expected to begin by the middle of next year, may be delayed beyond 2002 after the terrorist strikes in the US, a snap poll of chief executive officers (CEOs) conducted by the Confederation of Indian Industry (CII) has said.
The CEOs were unanimous that the impact of the US effect will be felt on software, aviation and tourism sectors. They were, however, divided on the extent of the impact with some saying it could be significant, while others expected the impact to be moderate. The CEOs, however, were hopeful that the post-monsoon period would be better especially since the monsoons have been good.
To gauge the impact on the Indian economy, the CII sought information from three critical sectors including foreign direct investment (FDI), foreign institutional investments (FII) and trade. The poll was, however, conducted before the US sanctions were lifted.
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The CEOs expect a significant impact on FII flows following the US strikes. The study revealed that a majority of them were concerned that the recent announcement of a hike in FII limits were yet to be reflected in daily trading.
A greater cause was the significant impact on FDI inflows. CEOs feared a chain reaction of the slowdown in the infrastructure sector. The CEOs endorsed a complete focus on implementation of infrastructure projects as the best short-term route towards economic growth.
The snap poll also highlighted some areas like exports, garments, gems, consumer goods and engineering goods as some of the sectors or products likely to face a negative impact.
On the financial market, majority of the CEOs emphasised the common view that badla should be reintroduced for infusing liquidity into the secondary market.