MUMBAI: India’s businessmen are cautious about growth and investment with many preferring to lie low till demand improves on the ground. As the Modi government nears its first anniversary, the bonhomie and cheer that greeted its arrival is gone, replaced by a sombre mood and a grim acknowledgement of the realities of doing business in India.Five of the top nine CEOs that ET spoke to said that things were difficult on the ground and that they would wait and watch. Weak demand, rural woes due to unseasonal rains, and the prospect of below-normal rainfall appeared to have sapped the spirits of investors and companies.Some have deferred their revenue targets but some others are going ahead with investments and are hopeful of a recovery six months later. Sanjiv Mehta, CEO of Hindustan Unilever, the country’s largest maker of soaps and detergents, said it is getting tough to predict any trend though growth has picked up this quarter. “In the last two years, growth rates have come down from mid-teens to 5-6 per cent. It is a volatile environment and it is important to have a long-term view.” HUL will continue to invest for its brand and market development, he added.Diversified conglomerate Aditya Birla Group, owned by Kumar Mangalam Birla and with interests from cement to retail, has deferred its revenue target by three years to 2018 while L&T, India’s largest engineering conglomerate, said some of its plants remain idle. “We have pushed our revenue target of $65 billion by three years to 2018 as both local and global economic environments had changed,” Chairman Birla said. The firm wanted to reach the target this year itself. L&T is not committing any fresh investments after spending heavily on shipyards which can build defence equipment.“All facilities are lying idle,” said AM Naik, chairman, L&T. “I would say I am neither optimistic nor pessimistic; Iam being realistic and cautious about growth.” Demand for capital goods continues to remain weak and industrial production is limping along. Infrastructure investment is tepid and heavily indebted companies have been put off from committing too much to new investment by lender pressure and a tighter fund-raising environment.Consumer demand, on the other hand, appears to be better for some companies like Godrej and Maruti which have benefitted from customer support for their products.Adi Godrej, billionaire owner of Godrej group, said he expects a robust GDP growth and consumer demand pickup to accelerate during the next two years. Maruti reported strong numbers for 2014-15 and continued its upbeat sales performance in the first month of the new year. Chairman RC Bhargava said it is unrealistic to expect all problems that have accumulated for so many years to be set right in one year itself. “When an individual company undergoes a slump, it takes years to turn it around, and here we are talking about economy,” said Bhargava.“There is a lot of unrealism in people’s mind…They expect that because of Mr Modi everything will change overnight.” Some businessmen and company executives said many government promises were not spurring demand and would not commit new investments.“There are a lot of promises but that is not helping on the ground demand to kick-start consumption and growth,” said Subodh Bhargava, former chairman of Eicher Motors and an executive director on the Tata Motors board. Logistics companies such as Blue Dart are investing in premises, information technology and automation as they bank on e-tailing logistic business to earn higher revenues to stay ahead of the curve. These firms also have not seen much improvement on the ground. “Though we have not seen much improvement on ground level, we expect things to improve, if not in six months then in one year,” said Anil Khanna, managing director at Blue Dart, India’s largest courier firm. Sanjay Lalbhai, owner of India’s largest denim maker Arvind Ltd, said he has no plans to hold back any investments.“We are not holding back any investments since the policy frameworks are all in place,” said Lalbhai, adding that there were concerns about contentious legislations around land, power and mining.Metal companies have suffered the brunt of the slowdown and economic pain caused by cheap imports and the shuttering of ironore mines across the country. And they are among those who are conservative and cautious.Tata Steel, India’s largest private steelmaker, said lower government spending, liquidity crunch and lower rural consumption are the three concerns for revival. “Ongoing reforms by the government and reversal in interest rate cycle should spur growth,” the company said in a presentation to investors after announcing the fiscal third quarter results on February 6. The company until now had spent roughly Rs 19,800 crore to build a 6 million tonne steel plant in Kalinganagar in Orissa in the last 10 years. The project’s second phase has not been announced yet.Tata’s rival JSW Steel, owned by billionaire Sajjan Jindal, has cut its capital expenditure by 20 per cent to Rs 6,000 crore for fiscal year 2015. “Investments going forward will depend on local demand and government’s action against rising imports,” said Joint Managing Director Seshagiri Rao. Global economic agencies said the growth forecast of 7.5 per cent in the next two fiscal years will be primarily driven by business-oriented reforms and improved investor sentiment.“India’s expected growth acceleration is being driven by business-oriented reforms and improved investor sentiment” and that growth could reach 8 per cent in fiscal year 2017-18 on the back of significant acceleration in investment growth,” World Bank’s South Asia Economic Focus report said recently.