India slips on global map for business opportunities

Seven per cent of global CEOs repose their trust in India, compared with 10 per cent last year: PwC survey

When chief executive officers (CEOs) of global companies were asked to rate three countries that would contribute largely to their overall growth, India fared slightly poorer than last year, according to the 17th Annual Global CEO Survey by PricewaterhouseCoopers. However, compared to their global counterparts, Indian CEOs were more upbeat about growth, with about half saying they were "very confident" of growth prospects in the next 12 months.

In the survey, seven per cent of global CEOs reposed their trust in India, compared with 10 per cent last year. For Brazil, the number slipped from 15 to 12 per cent. While that for China rose from 31 to 33 per cent, Russia stuck to last year's figure of seven per cent.

"China remains robust, thanks to vast foreign exchange reserves and extensive reform measures introduced by the central government. But Brazil is suffering from a huge debt hangover and India has been slow to open up its markets," says a report based on the survey. "Russia is unduly reliant on commodity exports and South Africa's growth has been impeded by heavy regulation." (WORLD ECONOMIC GROWTH)

India has faced criticism over its dilly-dallying over foreign direct investment in organised retail and its policy to tax companies retrospectively. Scams such as those related to the allocation of second-generation telecom spectrum and coal block licences have further marred its image. Last year's report had identified Indian market as "decelerating", while those in Brazil, Indonesia and South Africa were said to be "accelerating".

CEOs say now, they are exploring growth in countries beyond Brazil, Russia, India, China and South Africa (BRICS), adding they see good prospects in Indonesia, Mexico, Turkey, Thailand and Vietnam through the next three to five years. The US, Germany and the UK have been ranked high on the list.

Against half the Indian CEOs confident of growth though the next year, the corresponding number for global CEOs stood at only 39 per cent. From both the segments, 43 per cent felt the global economy would improve in the next one year.

Asked whether they were paying a fair share of tax, 88 per cent of Indian CEOs agreed, against the global average of 75 per cent. While 57 per cent of Indian CEOs are expected to increase headcount in the coming year, only 13 per cent said they would cut jobs. The corresponding figures for global CEOs stood at 50 per cent and 20 per cent, respectively.

Looking ahead
The report said though an increasing number of CEOs felt the global economy was looking up, they continued to send out mixed signals. Last year, while advanced economies were struggling, emerging economies surged; this year, while advanced economies are returning to the growth path, growth in some emerging economies is decelerating

"CEOs have begun to regain confidence. They've successfully guided their companies through recession and now, more CEOs feel positive about their ability to increase their revenues and prospects for the global economy," said Dennis M Nally, chairman of PricewaterhouseCoopers International. "However, CEOs also acknowledge generating sustained growth in the post-crisis economy remains a challenge, especially as they deal with changing conditions such as slowing growth in emerging markets." Nally added worries continued to loom large, with CEOs sending a clear message to governments about their concerns about over-regulation, fiscal deficits and tax burdens.

Growth drivers
Over 80 per cent of international CEOs believe technological advances will transform their businesses in the next five years. About 60 per cent feel demographic shifts, and an equal number feels a shift in global economic power, will drive their growth during this period.

For the survey, 1,344 CEOs, across 68 countries, were interviewed between September 9 and December 6, 2013. The majority of these interviewees were from the Asia-Pacific. From India, Apollo Hospital's Preetha Reddy and ICICI Bank's Chanda Kochhar were included the list of those interviewed face-to-face; the rest were interviewed through post, telephone and online.