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With investments and demand set to grow in India capacity utilisation and employment will increase in FY-2019, say industry leaders.
“The economy is in a sweet spot right now as the adjustment process regarding major reforms of the past few years is largely stabilised and industry is ready for a fresh phase of investment while capacity utilisation builds up,” said Rakesh Bharti Mittal, President, Confederation of Indian Industry.
A CEOs opinion poll conducted by the Confederation of Indian Industry consisting of over 80 senior corporate leaders showed that 82 percent of the CEOs expect GDP growth to be higher than 7 per cent for the fiscal 2018-19 and 10 per cent of them expecting growth to be above 7.5 per cent.
Over 80 per cent of respondents expect capacity utilisation to increase in the fiscal year from the current 74 per cent. The leaders polled expect further increase in consumption demand and rise in private investments during the coming year. There is an overall belief all these will give fillip to employment generation.
On the international trade front, while CEOs expect exports to increase, imports are expected to increase as well thus leading to increase in trade deficit. “Exports registered 10 per cent growth over 2017-18 as the global economy is recovering and we expect the momentum to pick over the current year. Going forward, we must leverage stronger overseas demand and shifting global value chains through trade facilitation and competitive products,” Mittal said in the statement.
However rising raw material and fuel costs will be a key challenge. The industry leaders felt that credit and capital availability is of concern especially for the MSME sector. Bank loans could remain ‘sluggish’ for the next two-three years, and recapitalisation of public sector banks is an imperative going forward, the survey suggested.
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