India Inc upbeat, global CEOs stay cautious

Almost two-thirds of Indian CEOs (64 per cent) are confident of their company's growth prospects over the next 12 months, with 78 per cent expecting to maintain the momentum over the next three years. According to PwC's annual CEO Survey, compared with the 2015 levels, India Inc's buoyancy is up two points for the next 12 months and seven points for the next three years. In sharp contrast, average global growth prospects for the next 12 months and the next three years are 35 per cent and 49 per cent, respectively.

Around 1,400 CEOs were interviewed for PwC's 'Redefining business success in a changing world' survey, results of which were unveiled ahead of the World Economic Forum in Davos. The optimism of corporate India stands out amidst a gloomy outlook for the global economy in the next 12 months.

Globally, just over a quarter (27 per cent) of CEOs think growth will improve over the next 12 months, compared to 37 per cent in 2015. Around 23 per cent global corporate honchos think growth prospects will worsen. The levels of optimism among North American CEOs (16 per cent) is half that of the most optimistic regions (Western Europe 33 per cent and West Asia 34 per cent). Almost a third of China's CEOs (33 per cent) believe global economic growth will slow down in 2016.

Contrary to this trend, three-fourth Indian CEOs (75 per cent) said there are more growth opportunities for their company today, than three years ago. When asked to name countries that are most important to them in the next 12 months, 54 per cent Indian CEOs chose the United States, 29 per cent opted for China, while 23 per cent said the United Kingdom.

Commenting on the India findings of the report, Deepak Kapoor, chairman, PwC India, noted that recent policy reforms, consequent pickup in investments and the government's aim to boost infrastructure are uplifting companies' confidence.

"However, the CEO community continues to be concerned by lack of infrastructure and over-regulation," Kapoor added.

In keeping with their business optimism, 55 per cent Indian CEOs said they plan to enter into a new strategic alliance or joint venture, as against global average of 49 per cent. As many as 70 per cent Indian CEOs plan to hire more in the next 12 months.

According to the survey, the top three potential economic and policy threats highlighted by Indian CEOs were inadequate basic infrastructure, exchange rate volatility and over-regulation. For 81 per cent of Indian CEOs, availability of key skills was among the biggest business threats, followed by speed of technological change (79 per cent), and corruption (78 per cent).

Globally, CEOs see more threats to their businesses than three years ago with heightened concerns around geopolitics, exchange rate volatility and cyber security. However, over-regulation continues to be the top threat for the fourth year in a row.

Indian bosses don't expect much from the government on a stable tax system or mitigating income inequality.

Responding to changing stakeholder expectations, top executives across the world are changing how they define and manage risks. Nearly nine of every ten CEOs are changing the way they use technology as well as manage brand, marketing and communications.