INSUBCONTINENT EXCLUSIVE:
Growth engines are cranking up, finally
Data released by the Reserve Bank of India shows that capacity utilisation by domestic companies rose to over 75% in the March quarter, the
highest in the past two years.
Experts say this is a clear sign of a pickup in economic activity, and it will have a big positive impact on
the profitability of companies
Demand revival is sure to encourage corporates to dust off their expansion plans, as indicated by the pick-up in bank credit growth.
Higher
capacity utilisation also means India Inc getting its pricing power back
Although the firming up of prices will have a recoil effect on inflation, the impact will be negligible if growth picks up pace.
The Met
could push the economy into a highgrowth trajectory.
So are these early signs pointers to a revival in the investment cycle What will be the
economists and banking experts discussed the revival in the capex cycle
Here are the highlights:
MS UNNIKRISHNANMD CEO, THERMAXWe are almost closer to an investment cycle starting
Despite all the negatives in steel, it will start investing
I am expecting oil and gas to pick up
Core sectors will start investing
We are not an isolated society
We are going to take the global and domestic capacity building.
ARUN NANDACHAIRMAN, MAHINDRA LIFESPACE
I would say these are early days
There are industries where we have seen significant growth
RBI has picked figures from 10 large industries
I request the ministry to consider giving fillip to our ancillary suppliers who have no access to funds
We are seeing some positives but when election is round the corner people want to wait
Unless there is a strong push from RBI and government I see problems for MSMEs but not for large corporates.
MYTHILI BHUSNURMATHCONSULTING
Between 2009 and2013 capacity utilisation was consistently above 80% in the last quarter
As things stand right now while GST is stabilising, formalisation of the economy etc
is going to give us a fillip
There are vulnerabilities we cannot deny.
