Cost of credit biggest worry for CEOs: poll

Corporate honchos have cited cost of credit as their biggest concern impeding economic growth and investments, even as a majority of them said the interim budget would help increase overall demand within next six months, a poll of industry leaders by CII has said. An overwhelming 74 percent of respondents said that the interim budget would help boost overall demand moderately during the next six months whereas 21 percent believed that budget announcements would not lead to any change. Similarly, 38 percent of CEOs listed high interest costs as their major concern going forward. This was in contrast to the results of the previous poll when political uncertainty was ranked as the highest source of worry for the industry. "Without sacrificing the objective of fiscal consolidation, the Finance Minister's attempt to provide a fillip to manufacturing sector by altering excise duties in a few critical sectors is commendable," CII Director General Chandrajit Banerjee said. In a reflection of improving demand situation in domestic and global economies, albeit mild, a majority of the respondents expected their gross sales, exports, capacity utilisation and net profit to improve moderately in fourth quarter of current fiscal from the previous quarter. The mild improvement in business conditions has so far, however, failed to raise credit demand as 57 percent of the respondents expected no change. This indicates that new investment activities have not yet started picking up. Besides, 42 percent respondents said that they foresee investment revival only from the third quarter of next fiscal as new investment decisions are apparently awaiting the formation of the new government at the Centre. The interim budget was presented on February 17. When asked to rank the top risk factors to the business outlook in the current quarter, only 19 percent mentioned political uncertainty as the topmost concern.