The chamber, revising its growth forecast upwards from 6.5 percent to 6.7 percent for the next fiscal, said in its Economic Outlook Survey: "This improvement is largely based on the expectations of a possible cut in policy rates which is expected to have a positive impact on industrial growth and consumption."
"The revival in sentiment reflects cautious optimism and is an indication of improved sentiment post September 2012 mainly due to the government's renewed thrust to the reforms agenda," FICCI president Naina Lal Kidwai said in a statement.
FICCI survey respondents expect a repo rate cut of 0.25-0.5 percent in the forthcoming review of the monetary policy coming up on Jan 29.
A majority also felt that a reduction of 0.75 percent to 1 percent in the repo rate through the next financial year is more likely, which is critical for revival of growth, FICCI said.
Emphasising that with inflation risk receding, there was now some scope for easing in monetary policy, Kidwai said: "The possibility of the RBI (Reserve Bank of India) cutting rates will provide industry a fresh dose of oxygen and along with the expected US recovery, will breathe some life back into industry."
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Inflation figures based on the wholesale price index declined to a three-year low of 7.18 percent in December.
On fiscal deficit, the FICC president counselled carrying forward the Kelkar Committee report recommendations on fiscal consolidation.
"With fiscal deficit projections for FY14 at 5.1 percent, the process of fiscal consolidation should be pursued in right earnest," she said.
On the current account deficit, most FICCI respondents expected it to be not less than 4 percent of GDP for financial year 2014.
"With exports witnessing a decline and global demand likely to remain flat in the near term, it will be vital to extend support to the labour-intensive export-oriented units," Kidwai said.