India’s business leaders are increasingly gloomy about the country’s economic outlook, a survey published yesterday showed, as top corporate bosses prepared to meet Indian Prime Minister Manmohan Singh to discuss the weak rupee.
Singh, a veteran economist, has scheduled the meeting of the Prime Minister’s Council on Trade and Industry in New Delhi against the backdrop of an economy growing at a decade-low of 5 percent and a string of dismal indicators.
The rupee this month slipped to a record low against the US dollar amid a ballooning current account deficit — the broadest measure of trade.
The council includes India’s richest man, Mukesh Ambani, who heads petrochemical giant Reliance Industries Ltd, and Sunil Mittal, CEO of Bharti Airtel Ltd, India’s biggest telecom.
The survey, conducted by the Associated Chambers of Commerce and Industry, found 51 percent of business leaders believe the economic situation has worsened in the past six months, up from 23 percent who held that view in March.
The survey of 200 business leaders cited weak domestic and export demand, poor infrastructure, high cost of credit, soaring raw material prices and a rise in wage costs “as key factors adversely affecting the business performance.”
At yesterday’s meeting, the business leaders were expected to say that high interest rates have blunted the recovery of Asia’s third-largest economy.
Analysts expect the Central Bank of India to offer little cheer when it meets today, with most expecting it to hold interest rates steady.
Indian Minister of Finance P. Chidambaram and top government economic planner Montek Singh Ahluwalia are also expected to attend the meeting.
In April, Singh, whose government has come under fire from corporate India for policy drift, urged business leaders to “prove the prophets of doom are wrong” and avoid being “swamped by a mood of negativism.”