India's economic growth will improve further in the coming quarters due to recovery in domestic demand as also the investment cycle, according to the CII-ASCON Industry Survey. It said the demand and investment will be supported by better consumption patterns on account of favourable monsoon, moderation in inflation and the onset of festive season. The survey tracked the performance of 70 sectors during the first quarter of the current fiscal, as against the year-ago period.
"The ASCON Q1 FY19 Survey results reflect steady progress in economic growth. What is especially significant is that there has been a perceptible increase in the share of sectors recording higher growth," CII Director General Chandrajit said.
The survey witnessed fewer sectors anticipating negative growth trends, which clearly points towards improvement in the economic environment, he said.
It showed a sharp increase in the sectors witnessing 'Excellent' growth (>20%) in April-June 2018-19, over the year-ago period. The share of sectors witnessing 'Excellent' growth has improved to 14.3% (10 out of 70 sectors) in Q1 FY19 from 5.7% (4 out of 70) in Q1 FY18.
At the same time, the share of sectors recording 'High' growth and 'Moderate' growth has improved marginally while the share of sectors witnessing 'Low' growth (<0%) has come down substantially.
With respect to issues and concerns impacting growth, ‘Competition from Imports' (50%), ‘Regulatory Burden' (42.9 pc) and ‘Lack of required infrastructure' (41.7 pc) have been reported as the top three most important issues for the industry. Exuding optimism on the near-term growth outlook, 63.6% respondents expect the business situation in their respective sector to improve moderately where as 31% expect the situation to remain same in the next six months.
"The current expectations on the investment outlook for the next two months also points towards an impending recovery in investment cycle supported by improving capacity utilization levels amidst domestic demand recovery. “Further, a continuous push to structural reforms such as GST, PSU bank recapitalization and time-bound insolvency resolution would also support the recovery,” said the survey.