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February 10
16:05 2014

The PHD Chamber of Commerce and Industry has projected that national GDP by March 2015 is expected to accelerate at 5.5 per cent  with inflation cooling at 5 per cent as a consequence of anticipated recoveries in  developed and developing markets coupled with reformists’ measures, initiated by the government and the reserve bank of India in recent past.

The Chamber’s Business Outlook 2014-15, prepared by its research bureau based on a feed back from various segments of industry with a sample size of 511 respondents also estimates that the repo-rate could slip at 6 per cent from current level of 8 per cent.

A good percentage of the respondents feel that the apex bank is expected to carry out 25 basis point cut in its future monetary policy review to significantly subside inflation and interest rates to enable all segments of industry to access liquidity for its expansion and modifications.

43% of the respondents estimated GDP growth rate to hover around 5% to 5.5% in the coming financial year 2014-15 whereas 32% opined it  would touch 6% and another 25% suggested that the growth could fall  below 5%.

The study ‘PHD Business Outlook 2014-15’ has been undertaken to understand the business mood across various segments of the country and comprise responses from the senior management of large, medium and small corporate houses.

 The growth projections so far

World Bank






United Nations


Source: PHD Research Bureau, Compiled from various sources

Note: United Nations’ Projections are for calendar year 2014


Growth estimates provided by various national and international organizations are inspiring. According to IMF estimates in its World Economic Outlook, India’s growth for FY2014-15 is projected at 5.4% which is the second highest amongst the BRICS economies, said Mr. Sharad Jaipuria, President, PHD Chamber. Growth in China for the year 2014 is estimated at 7.5% while South Africa is estimated to grow at 2.8% in the year 2014. Brazil on the other hand is estimated to grow at 2.3% in the year 2014 while Russia is estimated to grow at 2% in 2014, he added.

 Respondents across the industry felt that with the recovery in advanced economies and strong growth in US economy during the recent quarters coupled with growth in emerging market and developing economies, growth in the Indian economy is also looking up. The investment climate in the country is reviving as the economy is headed towards higher growth in the 2014-15. Government has already cleared around Rs. 4 lakh crore projects in the past seven months since the inception of the Project Monitoring Group. So these large scale investment will help the economy to attain its lost momentum, said Mr. Jaipuria.

 According to the survey, the India Inc felt that headline inflation would subside further in FY2014-15 as 70% respondents indicated it to decline to a level of around 5% from the current level of around 6% and 40% respondents out of them even forecast it to be below 5%. However, the remaining 30% of them expected it to remain above 5%.

 Majority of the corporate (72%) felt that food inflation would cool to the range of 5% to 8% whereas 19% respondents expected food inflation to subside to the range of 8% to 10%. However, 9% respondents felt that it is going to remain in the double digits trajectory.

 In a bid to contain the sticky inflation, the key policy rates of RBI have been soaring at a high trajectory over the past many quarters. A large majority of corporate (70%) felt that Repo rate should be cut by 50 basis points at 7.5% from 8% at the end of FY2013-14.

However, by the end of FY2014-15, a large proportion of respondents (75%) felt that the Repo rate would be reduced by 200 basis points at 6%, with a 25 basis points rate cut quarterly.

 During the survey, majority of corporate appreciated the recent reform measures undertaken by the government in terms of clearance of various infrastructure projects, opening of FDI in various sectors of the economy, reforms in Land Acquisition Bill etc. However they were also concerned about the key critical reforms including implementation of GST and labour reforms.

 These reforms should be undertaken immediately of which implementation of GST should be at the top of agenda of the coming government. They felt that GST has potential to put India’s growth in high trajectory by at least 2 percentage points say, from the current level of 5-6% to 7-8%. Another critical reform, corporate were expecting from the government is in labour laws. Since labour laws were enacted about 50-60 years back, the laws in our country definitely need to be revisited, especially in light of the evolutionary changes in the industry, its types, processes and problems, said Mr. Jaipuria.

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