With manufacturing almost flat in the first quarter this financial year and inflation not coming down to a comfort zone, chief financial officers (CFOs) of Indian companies are not very optimistic about the macroeconomic numbers, shows a Deloitte India survey.
A major chunk — 46 per cent — of the respondents has expressed fears of further rise in inflation and tapering of economic growth with stagnant industrial expansion.
However, 39 per cent expect the gross domestic product (GDP) growth scenario to stabilise, while just 15 per cent expect an improvement in growth rate.
India's economy grew 5.5 per cent in the April-June quarter, a shade higher than 5.3 per cent in the previous quarter. Industrial output contracted 0.1 per cent in April-June against a 6.9 per cent expansion in the corresponding period of 2011-12. In June, industrial output declined 1.8 per cent, against a growth of 9.5 per cent a year ago.
The survey's findings are in contrast with the earlier survey, wherein 78 per cent of CFOs expected the GDP growth rate to be in the vicinity of 7-7.5 per cent by the end of 2011-12.
The financial officers have expressed their unhappiness over the political scenario in the country as 43 per cent said political inefficiency was the most important cause of concern in the country.
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It might be recalled that major economic reforms like foreign direct investment in multi-brand retail have been on the hold as no consensus is getting created among the political circles. Besides, no significant financial sector reforms bills could be tabled in the just concluded session of Parliament.
Besides, the rupee depreciation against the dollar and low consumer demand were cited as other negative factors.
CFOs of smaller companies, which have access to priority sector lending and have more nimble structures, are more optimistic.
Almost 50 per cent of the respondents were companies and Indian multi-national corporations a turnover of Rs 500 crore. Sector-wise, 30 per cent of them were from the manufacturing sector and 24 per cent from the consumer business segment.
The survey is based on responses from 136 CFOs, spanning listed and unlisted companies, across sectors.