IGI Logo

President of Confederation of Indian Industry (CII) R Dinesh has said private sector investment is set to witness a significant increase, as capacity utilisation in several key sectors has already crossed 80 per cent and economic growth is estimated to be 6.7 per cent in the current financial year. He also exuded confidence that the Reserve Bank of India (RBI) will maintain status quo on interest rate in the next bi-monthly monetary policy to be announced later this week. Citing the CII's annual CEOs survey, he said all sectors have crossed 75 per cent capacity utilisation and the figure was 80 per cent in key sectors like cement, steel, chemicals and machinery. He said ‘we are at the cusp of where private sector capex will see a significant increase happening’ and added that as per the CMIE data investment commitment of Rs 25.7 lakh crore was made last year, as compared to Rs 14.3 lakh crore a year ago.

Regarding the pressure points, Dinesh said at the global level the world economy itself is facing issues and at present no other country in the world is getting near to their normal growth rates. He said ‘from the domestic side, I think the only big worry for us is the El Nino effect on the monsoon’, and added that however, El Nino does not necessarily mean that there will be a low rate of growth. After a rare triple-dip La Nina, there is a probability of the warming of the equatorial Pacific Ocean in the coming months, called the El Nino phenomenon, that is associated with higher global temperatures, and it is likely to impact monsoon in India. La Nina refers to the phase of cooling of the sea-surface temperatures than normal.

Further, he said that the continued focus of the government on increasing spending to develop modern infrastructure is a ‘big blessing’ in ensuring that the economy grows and is also building a virtuous cycle. He said the other big advantage is good balance sheets of corporates and banks, and added ‘that gives us the comfort that overall we are in a very resilient position’. The government can not do much to address the global headwinds and the monsoon is also beyond their control. About possible impact of global economic uncertainties on India's exports, he said despite all odds, the country's outbound shipments are recording a healthy growth rate.