Services sector bullish on six-month prospects

New Delhi, Nov 5: The services sector expects the economy to grow above 8 per cent during the fiscal year 2006-07.

Ninety two per cent of the respondents of a Business Outlook survey done by CII for the period July-December 2006 has revealed major investment expansions.

Of these 70 per cent revealed investments over Rs one crore while the remaining 28 per cent showed investments of Rs 5 crore and above. The sector revealed a positive business outlook based on parameters like sales, new projects, repeat orders and customers and billing rates.

As many as 60 per cent of them voted for billing rates as the leading parameter for a positive business outlook, indicating that they are moving up the value chain. A whopping 89 per cent voted new customers as the reason for a positive business outlook.

Keeping in tune with the UPA Government's agenda to increase employment, 83 per cent of the respondents felt employment will increase during July-December 2006, the survey has indicated.

Other factors contributing to company growth prospects are new projects, voted by 90 per cent of respondents, and a higher sales value, voted by 92 per cent.

The value of exports is expected to rise as indicated by 81 per cent of the respondents.

However, the respondents feel the constraints on the movement of natural persons would remain to be the major cause of concern as revealed by 60 per cent of them.

Another third of the respondents feel these constraints may increase during the next six months. This calls for measures to mitigate existing restrictions on movement of natural persons.

More than half (54 per cent) expect the GDP to grow at over 8 per cent during 2006-07. This reflects its performance during the first quarter of the current financial year when it grew at 8.9 per cent compared to 8.5 per cent in the previous year.

The survey sector was planned to assess the confidence perception of the sector during July-December 2006 based on the emerging trends in the global and domestic environment. It explored business prospects as the macro and micro levels based on the parameters of income growth, employment, investment and trade.

UNI