GDP Encouraging But Challenges Await: Industry, Indian GDP Growth in 2010-11, Credit Availability For Indian Industry, GDP Growth Encouraging to Indian Industry

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SME Times News Bureau | 01 Jun, 2010
India Inc. has hailed the better-than-expected 7.4 percent GDP growth during 2009-10, but it is still jittery about numerous challenges, including poor credit availability to the industry, particularly the small and medium enterprise (SME) sector, and the Eurozone sovereign debt crisis which could draw down exports to the region in the coming days.

The PHD Chamber of Commerce and Industry, reacting to the 7.4 percent GDP growth estimates for 2009-10 released by the Government on Monday, viewed that despite the positives, there are still numerous challenges, both domestic and global, which could come in the way of a decisive economic recovery.

"Firstly, the world economy has still not fully recovered as has been demonstrated by the recent crisis in the Euro-zone," PHD Chamber President, Ashok Kajaria said on Monday, adding that credit availability to industry, particularly the SMEs, at cost effective rates should be ensured.

"The government should also give attention to exports so that the fluid situation in Europe has a least impact on our exporting units," he added.

Addling to the list of concern, he said that inflation remains a major concern especially that of food prices which show no signs of abating despite the arrival of fresh crops. "Besides, industrial recovery is still fragile and has yet to pick up in a big way," he added.

"For this it is important to develop a strong political will to implement the unfulfilled reform agenda in real earnest," the PHD Chamber chief said.

Another industry body, the Associated Chamber of Commerce and Industry (ASSOCHAM), while commenting that 7.4 percent GDP growth was on expected lines as Indian economy has started doing well, especially from November 2010 onwards, stressed that enough funds should be made available for infrastructure sector so that all key six core industries substantially contribute to GDP growth of close to 9% for current fiscal.

ASSOCHAM viewed that further liberliasation in FDIs policies as well as changes in tax structure with GST in place as promised will help Indian Industry grow faster with higher manufacturing pace to push up the GDP of Indian Economy as projected to close to 9 percent.

"Euro crisis as of now do not pose much of challenge to Indian Economy but if they spread beyond a point, India’s external engagements could suffer but it is sure that the current growth movement will be maintained," said ASSOCHAM President Swati Piramal.