Despite tightening financial conditions and geopolitical tensions globally, around 73 per cent of the survey respondents expected only a moderate impact of the global slowdown on the Indian economy, CII said.

Eighty-six per cent believe that the government’s focus on infrastructure is the biggest positive for the Indian economy, followed by the improvement in tax collections and good consumption recovery.

“Growth is expected to moderate further in the next year on global headwinds….Hence, to support growth, it is critical that the RBI [Reserve Bank of India] refrains from raising the interest rates any further. Unsurprisingly, 47 per cent have indicated that they have already started feeling the impact of the policy rate hikes by the RBI on the overall economic activity,” said the statement, adding that high interest rates have impinged on private investment levels as well.

“In addition to high borrowing costs, the prevailing heightened uncertainty has prevented firms from furthering their investment plans. The survey results, however, presents an encouraging prognosis with nearly all the respondents (90 per cent) feeling that their company’s investment cycle will recover during the next financial year,” it said.

Policymakers have focused on the rural economy, which took a significant hit especially after the second wave of the COVID-19 pandemic and the more recent spike in inflation, respondents felt.

“It is encouraging to note that given its bearing on the overall economy, a recovery in the rural demand is eagerly awaited and about 60 per cent of the respondents feel that a pick-up in rural consumption will take place in the next fiscal,” CII added.

Fibre2Fashion News Desk (DS)