GDP growth will be well under 6.5 % this year: business leaders

Countering the government's optimistic estimates of 6.5 per cent economic growth this year, a survey by the Confederation of Indian Industries shows that an overwhelming majority of businesses feel the growth rate will be well below this figure.

Growth in GDP growth slipped to a nine-year low of 6.5 per cent in the last financial year ended March; but corporate India says even this figure will be difficult to maintain and fears further deceleration in GDP expansion during 2012-13.

The survey covered 110 business leaders. Of these, 43 per cent felt that GDP growth would be between 6 and 6.5 per cent; while 40 per cent expected it to be below 6 per cent. Only 13 per cent of respondents thought the economy could grow at 6.5-7 per cent, and just five per cent expected the GDP to expand at over 7 per cent.

Releasing the survey results today, CII said that the survey was conducted in various sectors of the economy which together contribute to 50 per cent of the country's industrial production.

The survey also corroborates what many experts have been observing – that Indian companies are increasingly looking to expand abroad as the domestic investment climate goes from bad to worse.

Some 29 per cent of respondents said they had curtailed their capital expansion plans in India. On the other hand, 47 per cent said they would like to maintain their current investment abroad at last year's levels, while 43 per cent said they would increase investments abroad.