The Hindu Business Line : Chambers hail `positive picture of economy'

EXPRESSING optimism in its reaction to the mid-year review of the Indian economy where the Government has forecast a 7 per cent growth in 2003-04, India Inc has said that that the mid-year review presents a positive picture of the economy.

According to Dr Amit Mitra, Secretary General, Federation of Indian Chambers of Commerce and Industry, "The 7 per cent rate of growth supported by the robust agriculture growth rate will stimulate purchasing power leading to multiplier effect on industrial order books of Indian corporates."

The control of inflation is an indication that the economy is not over-hitting despite significant growth momentum. This overall encouraging picture will lead to higher industrial growth and partial stimulation of exports to cost-competitiveness and efficiency increases, the chamber said.

The Confederation of Indian Industry said that the growth forecast for the current fiscal year announced by the Government today is in line with its own predictions of economic growth in 2003-04.

The Associated Chambers of Commerce and Industry of India has expressed confidence about recovery in agriculture this year and said that this should result in a growth rate of above 8 per cent for the economy.

The chamber also lauded the Government's focus on fiscal consolidation. It has, however, added that to sustain the feel-good factor in the economy, second-generation reforms (for example in power and labour) need to be instituted with immediate effect.

The PHD Chamber of Commerce and Industry, while welcoming the mid-term review, said that there was a need to identify areas of concern. According to the chamber, "This year's growth rate may eventually look good but the combined growth of two years taken together will not deliver an average growth of more than 5.5 per cent, which is similar to that of the past two decades".

"Despite the favourable growth trends evidenced this fiscal, the situation on the domestic front is not sufficiently beneficial to revive confidence in industry," the chamber added.

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