Demand, which has grown ahead of expectations so far, is likely to maintain the same pace for the rest of FY21. 75 per cent of poll participants said the revenue growth of their companies is likely to top 10 per cent in FY22. Of this, 33 per cent believe it could go as high as 20 per cent plus.

So far so good. The recovery of the economy is essential to get back the growth process which got disrupted after March this year with the clamping of lock down from March 25. Since then, there has been easing of lock down in phases and the economic activities have resumed in a phased manner. The CEOs and the senior executives had a good time during the last ten months but the workers, especially those who lost their jobs or were asked to sit down at home with less earnings, are still suffering. Their living standard has fallen and the increased earnings of the companies in the coming days do not ensure that they will be compensated for their loss.

But the poll also revealed some anxieties about demand sustaining in the wake of rising inflation and the impact on interest rates. A majority of respondents (54 per cent) also said that the government has not done enough to spur demand.

“The economy is picking up significantly faster than anticipated in March-April,” said Keki Mistry, vice chairman, HDFC Ltd. “People seem to have taken Covid-19 in their stride and are going about their day-to-day business pretty much as usual. Many sectors are seeing growth equal to (and in some cases better than) pre-Covid levels.”

The poll was conducted last week with 60 CEOs, with participation ranging from auto and aviation to travel and real estate.

“The worst seems to be behind us and there are multiple sectors where recovery has been better than expected,” said Amitabh Chaudhury, CEO, Axis Bank. “The trend in credit growth also seems to be improving. In fact, our secured disbursements are now near pre-Covid levels. However, since there has been a significant scarring of so many people who are a large part of the workforce, it will definitely take some time. The recovery is uneven and missing out some of the vulnerable segments.

“Banks are working with RBI and government to deliver credit to the most impacted segments through schemes like ECLGS,” he said.

Many CEOs also believe that inflation is a clear and a present danger to consumer sentiment. About 63 per cent of the poll’s respondents said that rising inflation will hurt consumer demand. About 68 per cent of CEOs believe that interest rates will stay at current levels, contrary to expectations of a series of steady rate cuts during the monsoon period this year with about 18 per cent saying that rates will rise from current levels.

"The lockdown has impacted the economy and the focus is now on getting a strong recovery in 2021," said Sunil Kataria CEO India and Saarc, Godrej Consumer Products. "Going forward, we would like the government to focus on creating more jobs. This would require investments in infrastructure and core sectors. The rural sector stimulus along with a good monsoon has led to some recovery in rural consumption, but it’s important that this is sustained. Lastly, MSMEs would need more credit support programmes to accelerate their recovery."

India Inc attributed the expected strong demand to a number of reasons such as the expansion of credit, strong liquidity, rate cuts and festive period buying. Real estate and home finance companies believe that the need for owning a home, affordable rates and state-centric tax sops such as stamp duty cuts have spurred housing demand. Auto companies believe that pent-up demand and the need to own a vehicle and reduce dependency on public transport have pushed up sales of cars and two-wheelers. Rural demand has also benefited from strong monsoon and good kharif production.

The latest moves of the industry bodies as also government have been taking no account of what can be done to ameliorate the harsh conditions that the labour has been facing due to the impact of pandemic. The mood in the ruling establishment is such as if the economy will move faster keeping the labour aggrieved. The passing of the labour laws in the last session of parliament as also the three farm laws have led to continuous actions in the last few weeks. The farmers organisations are still battling the government for the repeal of the farm laws. There was a Bharat Bandh on December 8 and the farmers have blockaded the highways. The central trade unions have supported them.

It is time the Narendra Modi government talks with both the farmers and workers representatives to bring about a solution to their grievances for the advancement of Indian economy. Only corporate friends of the ruling establishment can not bring economic recovery in this Bharat. (IPA Service)