Doing business at the level of grassroots is proving to be cumbersome for companies, This along with the high cost of doing business is styming the animal spirits of the private sector, according to a survey by industry chamber CII released on Sunday.

However, it said that significant recovery in corporate performance is expected in 2021-22 as the government’s pro-growth initiatives and announcements have helped nurture the animal spirits of the sector, according to a CII survey.

“Responding to the question on what is affecting the animal spirits of the private sector, majority of the CEOs (51 per cent) indicated that ease of doing business was still cumbersome at the grass roots, followed by cost of doing business (other than capital cost) being high, as indicated by 32 per cent of the CEOs,” CII said in a statement.

About one-third of the CEOs indicated that the current capacity is still in excess of demand, it added.

The survey also said about 46 per cent of the 117 CEOs, who participated in the survey, expected more than 10 per cent revenue growth of their respective company in the first half of the current fiscal compared with the first half of pre-pandemic year 2019-20.

“The CEOs’ poll clearly indicates significant recovery in corporate performance with both topline (revenue) and bottomline (profit) growth expectations to be better than the pre-pandemic levels.

“The government’s pro-growth initiatives and announcements have helped nurture the animal spirits of the corporate sector which has seen the worst economic shock of our lifetime,” it added.

On exports, it said the majority of the CEOs polled indicated that countries, including the US and Canada, will post significant growth in the first half of the current fiscal year, followed by Europe, West Asia and Africa and Asia-Pacific.

“About 70 per cent of the CEOs polled expected inflation to be up to six per cent during the year 2021-22, which is within the RBI’s inflation range and should help the RBI retain low interest rates to promote growth,” it said.

FSDC meet on Sept. 3

Finance minister Nirmala Sitharaman has called a meeting of the Financial Stability and Development Council (FSDC) on September 3 to discuss the state of the financial sector and a strategy to support the nascent recovery of the pandemic-hit economy. This would be the 24th meeting of the FSDC and the first during the current financial year.