A majority of Chief Financial Officers at companies in India don’t expect the government to meet its fiscal deficit and economic growth targets in the coming financial year, finds a survey by Yes Bank Ltd and Mint.
India's government says it will try to rein in the fiscal deficit at 4.8% of gross domestic product (GDP) in the year starting 1 April, from 5.2% in the current financial year. Meanwhile, India’s GDP growth in fiscal 2014 is projected at 6.5%, up from an estimated 5% this year.
Conducted at the Yes Bank National CFO Forum, the survey of 91 chief financial officers (CFOs) found that around half the respondents don’t expect the government’s fiscal deficit target to be met; 76% estimate India’s GDP to grow between 5% and 6% in 2013-14, lower than the government’s projection.
According to the CFOs, eradicating infrastructure bottlenecks is key to reviving economic growth; 62% said the budget didn’t provide adequate support to infrastructure.
Most of the CFOs also said the budget didn’t give sufficient impetus to the growth of small and medium enterprises, which employ a large portion of India’s workforce.
The CFOs support the higher revenue allocation made by the budget for agriculture, which they said would help ease supply-side constraints hindering farm growth.
They are also upbeat about prospects of the Reserve Bank of India easing interest rates further to stimulate economic growth, capital investment and consumer spending.Yet, they are uncertain about raising capital either in the form of debt or equity.
Most said they still faced liquidity constraints.