‘Inspite of Slowdown Indian Managers remain Bullish about Prospects of Indian Economy’

Highlights of the ‘Perception Survey’ commissioned by All India Management Association (AIMA)

Key Highlights:

The global economy is going through one of the most extreme recessions in the last 50 years; most global economies are either contracting, or witnessing a decline in growth rates.

Impact in India is lower, with limited exposure to global economy, and strong demand by the local consumption class; sectors which have been hurt more in India are those with relatively higher global exposure.

Indian managers believe the world economy has had a limited impact on Indian economy, pulling down the estimated GDP growth rate of India in 2009 to 4.5 percent

Sentiment is stronger among the public sector employees with higher job security and recent increase in pay-outs.

New Delhi, 11th June,2009: According to the’ Perception Survey’ commissioned by All India Management Association(AIMA), Corporate India remains optimistic about the economic situation and believe that the situation will further improve in the next 18 months and that the third world countries will become more powerful as a fallout of the global economic slowdown.

The survey highlights the voice of the middle management of the Indian corporate structure, across MNCs, private companies & public sector companies

Mr. B.S Sahay, Chairman AIMA Research Committee said, “With the stable government in power again, reforms will be unstoppable. Special focus should be laid on employment generating projects and increasing money flow in the economy besides reducing taxes to bring back both consumers and investors confidence ,”

Adding further, Ms Rekha Sethi, Director General, All India Management Association (AIMA), said ”The global economy is going through unprecedented times. The Impact on India is lower, because of limited exposure and strong demand by the local consumption class. Sectors which have been hurt more in India are those with relatively higher global exposure.”
“AIMA as an apex management body has been witness to one of the difficult recessions in recent times where most global economies are suffering deeply. This survey is an attempt by AIMA to give voice to the well being of the middle management which has always been one of AIMA’s key concerns. AIMA will be brining out such surveys and reports every six months on good managerial practices and how the managers can upgrade their management skills,” she further added.

As per the survey conducted among 450 middle- level managers across sectors such as pharmaceuticals, automobile, energy and power, telecom and IT the respondents blamed the sub-prime crisis in the US and weak corporate governance as the main cause of slowdown. Low sentiments has brought down consumer expenditure due to the sense of job insecurity despite the fact that there has not been a steep decline in the income levels. Consumer spending has declined mainly in lifestyle. While spend on children and food products have gone up, there has been no significant change in spend on automobile and household durables.

Almost half of the respondents felt that liquidity crunch is the major problem facing corporate India. Despite higher optimism for Indian economy, around 35% of those surveyed believe that economic recovery in India and rest of the world will not be too spaced out. This reflects the fact that Indian economy is not isolated from the global market. Besides the US, BRIC countries, especially India and China, will be the primary growth drivers in the global recovery.
The survey also reveals that among the respondents, managers working with public sector companies were more optimistic about the economy than their peers in the private sector. While most Indian private companies are trying to minimise risk by pulling back investments and cutting costs, public sector firms are taking steps to bring down operational expenses.

The survey was done in all the major metros of the country-New Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bangalore, Pune and Ahmedabad. It covered 445 middle management executives aged between 28-45 years working in private companies including MNCs and Public Sector undertakings.

About AIMA: The All India Management Association (AIMA) was created as an apex body of professional management with active support of the Government of India and Industry in 1957. Its activities include distance management education, management development programmes, national events, competitions, research, publication and testing services.

For further information please contact:

Ms Ranjana Bhardwaj
AIMA
9313342654
rbhardwaj {at} aima-ind(.)org

Vaishnavi Corporate Communications

Ms Shaila Srivastava

Cell No: 9717293602

E-Mail ID: shaila.srivastava {at} vccpl(.)com