Indian industry has divided its in perception of growth outlook of the economy for the year 2013-14, said a study by the PHD Research Bureau of the PHD Chamber of Commerce & Industry.

According to the study, 34 percent of the respondents estimated GDP growth rate to be hover around 6 percent to 7.5 percent in the coming financial year 2013-14, 33 percent of the respondents opined that GDP growth rate would touch 7.5 percent to 9 percent and another 33 percent suggested that GDP growth would fall below 6 percent, according to a survey undertaken by the PHD Research Bureau of the PHD Chamber of Commerce & Industry.

The study 'PHD Business Barometer 2013-14' has been undertaken to understand the business outlook across various segments of the country in the coming financial year. During the course of the survey, a sample size of 277 was chosen which included responses from the senior management of large, medium and small corporate houses across the country.

A large share of 75 percent respondents felt that agriculture sector growth would stay within 2 percent to 4 percent while the majority (60 percent of respondents) felt that industry sector would grow below 6 percent. Regarding the growth of services sector, 61 percent respondents felt that the sector would grow at 7.5 percent to 9 percent, during FY2013-14. The inflation expectations of the 50 percent respondents hover at the high trajectory of 7 percent to 10 percent during the same period.

Respondents across the industry felt that amidst intensifying euro-zone crisis, slowdown in the advanced world and its contagion spreading across the developing economies, the Indian economy is also going through a rough patch. The investment climate in the country is that of despair with dampening of India’s corporate business sentiments. However, they (majority of 77 percent respondents) also felt that the slowdown seems to have bottomed out and the economy is headed towards higher growth in the 2013-14.

The study indicated that while a large proportion was optimistic on their growth outlook for FY2013-14, a considerable share was relatively pessimistic. While 34 percent of the respondents estimated GDP growth rate to be hover around 6 percent to 7.5 percent, 33 percent of the respondents opined that GDP growth rate would touch 7.5 percent to 9 percent and another 33 percent suggested that GDP growth would lie below 6 percent.

The survey revealed that the majority of the respondents (75 percent) forecast the agriculture growth to lie within 2 percent to 4 percent while 20 percent were optimistic that agriculture would grow within 4 percent to 6 percent. However, the remaining 5 percent of the respondents felt that agri-growth could fall at 2 percent and below.

A majority of the respondents (60 percent) forecast the industry growth to hover below 6 percent during FY2013-14, while 30 percent believed that industry would grow within 6 percent to 7.5 percent. Amongst the respondents some were very optimistic as 8 percent of them felt industry would clock a growth of 7.5 percent to 9 percent and remaining 2 percent felt industry has the potential to grow at 9 percent and above.

Looking at the robust performance of services sector over the last few years, corporates felt that services would remain a high-point in India’s growth story. According to the survey, a large proportion of the respondents (61 percent) believed that services growth to lie with 7.5 percent to 9 percent in FY2013-14 and 25 percent of the people felt that it would grow at 9 percent and above. However, the remaining 14 percent opined that it would grow at 6 percent to 7.5 percent.

As far as infrastructure growth was concerned, the majority of the respondents (46 percent) felt that it would lie between 2 percent to 4 percent while 33 percent believed that growth would lie within 4 percent to 6 percent. While 12 percent of the respondents indicated growth at 6 percent & above, 9 percent of them forecast infrastructure growth at 2 percent and below.

According to the survey, the India Inc felt that headline inflation would remain on the high trajectory in FY2013-14 as 50 percent indicated it to lie within 7 percent to 10 percent and 3 percent of them even forecast it to be in the double digit trajectory. However, the remaining 47 percent of them expected it to lie within 4 percent to 7 percent.

Majority of the corporates (64 percent) felt that food inflation would cool to the range of 4 percent to 7 percent whereas 31 percent expected food inflation to remain with 7 percent to 10 percent. However, 5 percent respondents felt that it is going to enter double digits trajectory once again.

In a bid to contain the sticky inflation, the key policy rates of RBI have been soaring at a high trajectory over the past many quarters. A large majority of corporates (70 percent) felt that Repo rate would be cut by 50 basis points at 7.5 percent at the end of FY2012-13.

However, by the end of FY2013-14, a large proportion (65 percent) felt that the Repo rate would be reduced by 150 basis points at 6 percent, with rate cut of 25 basis points cut quarterly. Amongst the rest of the respondents, 20 percent of the respondents believed that Repo rate would be cut by 50 basis points, while 12 percent felt it would be cut by 25 basis points and 3 percent of them thought it would remain same by end of the FY2013-14.