CEOs expect economy to improve substantially with Narendra Modi govt

Written by PTI | New Delhi | Updated: May 25 2014, 18:25pm hrs
Signalling good times ahead, most CEOs project a substantial improvement in the near-term economic situation with the Narendra Modi-led new government taking charge at the Centre, according to a Ficci survey.

A whopping 93 per cent out of the 76 CEOs covered by the survey said they foresee a substantial improvement in the near-term economic situation while the remaining 7 per cent of the participants expected a marginal improvement.

"The decision making machinery at the government level has witnessed a significant slowdown in recent past which has had an impact on growth as well. With new leadership on board, 93 per cent of the participating CEOs said that they certainly see a reversal as far as this trend is concerned," Ficci said.

"We hope that the new leadership will restore much-needed investor confidence, attract higher investments and generate employment, especially in the manufacturing sector. Industry must be seen as a key factor in the nation's advancement by enabling efficient provision of goods and services and creation of jobs," it added.

Eighty-two per cent CEOs cited a substantial improvement in their business and investment prospects over the next 12 months.

The corporate honchos also spelt out the major challenges before the new government, even as the growth has decelerated notably and manufacturing sector remains in a bad shape.

Alleviating problems related to securing land, amending archaic labour laws, taming price rise and introducing much- needed tax reforms should be the priority areas for the new government, Ficci said.

"Issues related to factors of production - land, labour, capital and power - are amongst the most critical challenges that the new government will have to deal with. Inflation and need for tax reforms were also cited as other immediate concern areas," the industry chamber said.

Besides, the CEOs highlighted infrastructure development, rise in non-performing assets of banks and the law and order situation in the country as areas that need urgent attention of the new government, apart from reviewing the impact of free trade agreements on the economy and industry.

They suggested that the government should consider repealing retrospective tax provisions (now deferred for two years) as it has had negative implications on investment environment.

The forthcoming Union Budget should seriously look at subsidy rationalisation and bringing stability in the fiscal regime, the CEOs said.