Notwithstanding Omicron, Indian economy set for strong rebound: CEO poll

55% of the CEOs polled said that services sector would get adversely impacted due to the spread of Omicron

A CEOs poll by industry body Confederation of Indian Industry (CII) has shown the economy is set for a strong rebound this financial year ending March 31, 2022. At least 56 per cent of about 100 CEOs polled have said it would grow in the range of 9 to 10 per cent, while another 10 per cent expect it may grow at a faster pace of more than 10 per cent.

However, more than half of the CEOs polled appeared worried about the new Covid variant that may impact the mainstay of the Indian economy – the services sector. More than a third said even the manufacturing sector would get impacted.

The respondents were also upbeat on sentiments regarding their business, with 35 per cent of them indicating that the increase in revenue this year may be in the range of 10 to 20 per cent when compared to pre-covid year (2019-20), while another 33 per cent of the CEOs indicated expectations of a bigger jump in revenues (more than 20 per cent increase when compared to the pre-Covid year).

On gross profits front as well, 35 per cent indicated more than 20 per cent increase in gross profits when compared to the pre-Covid year, while another 17 per cent said an increase in growth of profits by 10 to 20 per cent. This optimism among the CEOs is despite more than third of them (70 per cent) observing that supply chain bottlenecks were causing problems in the movement of goods in their industry sector, the data showed.

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Further given the pick-up in business activity this year, 59 per cent noted that capacity utilisation in their companies was currently in the range of 70 per cent to 100 per cent, while 18 per cent of them felt that the current capacity utilisation would be more than 100 per cent. Nearly a similar proportion (62 per cent) projected capital expenditure in their companies for the year 2022-23 to be up to Rs 500 crores.

“Government’s strong emphasis on public works, timely interventions to boost liquidity and several reforms carried out in the recent months including easing regulations, Production Linked Incentives scheme and several other bold reforms have buoyed the optimism on higher economic growth,” said T V Narendran, President, CII.

The CEOs poll also said that the services sector would get adversely impacted due to the spread of the new variant, while another 34 per cent indicated that the spread of the new variant would adversely impact manufacturing activities.

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