• Home
• /
• Business

Indian economy to weather Iraq war

NEW DELHI More than 60 per cent of Indian industrialists say a US-led attack on Iraq would have only a moderate negative impact on India's economy, a survey found yesterday.

Only 23 per cent believed there would be a significant negative impact, said the Confederation of Indian Industry poll.

Seventy-nine per cent of industrialists felt inflation would increase "moderately" as a result of a war.

Thirteen per cent said the impact on inflation would be "significant" and eight per cent felt war would have no effect on inflation, according to the survey which was quoted by the United News of India agency.

However, industrialists agreed the extent of impact on India's economy would depend on the duration and intensity of a war.

India imports a majority of its oil requirements, mostly from the Gulf, and also depends on remittances from some three million workers in the Middle East.

The Indian government has come out against any unilateral US attack on Iraq.

Separately, 87 per cent of industrialists wanted the Indian government, in its budget to be presented before parliament February 28, to implement a value-added tax to "streamline the taxation system" and enhance competitiveness.

On growth prospects, close to 90 per cent of respondents said they expected the economy to grow by five to six per cent in the fiscal year ending March 31.

India's official Central Statistical Organisation has estimated growth would slump to 4.4 per cent this year from 5.6 in 2001-2002.

For the 2003-2004 fiscal year, 51 per cent of industrialists said the economy would clock more than six per cent growth, while 41 per cent said it would be between five and six per cent.