India Inc rates Centre poorly on inflation

New Delhi, Nov 28 | Updated: Nov 29 2004, 05:30am hrs
India Inc expects the UPA government to perform better on major macro-economic issues and external trade negotiations but was apprehensive on inflation and unemployment, according to an Ncaer survey.

Nearly 50% of the respondents in the survey felt that the present government would perform better on the economic reforms over the next six months, the National Council for Applied Economic Research (Ncaer) said in its business confidence index survey.

The survey, carried out on select 610 respondents, asked how the current political leadership would perform on issues such as managing economic growth, government finances, inflation, unemployment, exchange rate, political climate, external trade negotiation and economic reforms.

Stressing that pessimism to a large extent had given way to optimism, the Ncaer survey said it is on the issue of managing unemployment and inflation that the current political leadership has got the lowest rating.

Only about 21% of the surveyed firms felt that the present dispensation would perform better in managing the issue of inflation, it said. The wholesale price index (WPI) inflation has been over 7% since July and had even touched a four-year high of 8.33% in August.

Only about 13% of the respondents felt that the UPA government could manage the issue of unemployment.

On a region-wise analysis, north India gave the highest rating on the performance of the political leadership on the listed economic parameters. Nearly 37% of the firms from north, east and west feel that the present political leadership was going to perform better over the next six months on various economic parameters, the Ncaer survey said.

However, this percentage drops to just 21% for firms belonging to the south, it said.

On the overall, the survey said about 48% of the firms surveyed reported that the governments performance on various economic paramters would be the same and about 21% of the firms said it would be worse than now.

Ncaer said after the parliamentary elections in may when the new UPA government took charge, not only did the stock market react sharply leading to massive decline in the bse sensex, the overall industrial and investment climate also worsened due to lingering political uncertainty. In fact, it began appearing as if the fast unfolding political development will perhaps dislodge growth prospects of financial year 2004-05, the survey noted.