Indian CEOs are much more confident of delivering growth in the next 12 months or three years than their global peers, reveals the 15th PwC Annual Global CEO Survey. The survey findings will be the basis of a panel discussion at the PwC-Business Standard CEO Summit 2012 in Mumbai on Thursday.
The panelists are Ajit Ranade, group chief economist, Aditya Birla Group; Harsh Mariwala, chairman and managing director, Marico Ltd; Sajjid Chinoy, India economist, JP Morgan; Akhil Gupta, chairman of Indian Operations at the Blackstone Group; and Deepak Kapoor, chairman, PwC India.
Fifty-five per cent of the Indian CEOs polled said they were very confident of growth in the next 12 months, compared to only 40 per cent of the global CEOs. And why not? Though the Indian economy is likely to grow at 7 per cent this fiscal—still the second-fastest growing economy, after China. But this exuberance is not fully in sync with their faith in the domestic market.
A larger number of Indian CEOs (30 per cent against 18 per cent of global CEOs) expect growth to come from new markets in the next 12 months while 38 per cent of them (against 30 per cent global CEOs) believe growth will come from an increasing share of existing markets. Strangely, only 18 per cent of Indian CEOs (against 28 per cent global) think new products or services could drive growth.
Indian CEOs embrace cost-cutting measures in the last 12 months in the same measure as their global peers, and they will continue to pursue this in the next 12 months. But given the business confidence in the country, only 12 per cent of Indian CEOs (against 49 per cent global) will enter into a new JV or alliance this year.
This is explained by their different concerns vis-a-vis the global CEOs. Ninety-two per cent of Indian CEOs were concerned about bribery and corruption (vs. only 34 per cent of global CEOs), followed by uncertain or volatile economic growth, over-regulation (it concerns 83 per cent of Indians but only 55 per cent of global CEOs), exchange rate volatility (79 per cent vs. 66 per cent), fiscal deficit and debt burden (79 per cent vs. 66 per cent) and protectionism (75 per cent vs. 44 per cent).
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But there were many other areas where the responses were similar. Both Indian and global CEOs (79 per cent vs. 70 per cent) planned to change their business strategy in the next 12 months, but not significantly. Both Indian and global CEOs expanded their headcount in the last 12 months (55 per cent vs. 53 per cent) and will continue to do so in the next 12 months. Only 14 per cent of Indian CEOs (vs. 18 per cent global) expected to cut their workforce this year.
But what should cheer investors and regulators is that Indian CEOs said (93 per cent vs. 67 per cent) they intend to change their approach to risk, engage more with their boards (83 per cent vs. 35 per cent) and focus on building reputation and rebuilding trust (76 per cent vs. 50 per cent) and strategies for managing talent (95 per cent vs. 78 per cent).