Business Standard

Indian execs pessimistic about infra investments: KPMG study

Image

Press Trust of India New Delhi

India needs significant investment in the infrastructure sector as 30 per cent of corporate leaders feel that the current infrastructure is inadequate to support their business needs and long-term growth.

According to a survey by KPMG International and Economist Intelligence Unit, senior executives globally agree that infrastructure is critically important and affect the operating costs and business decisions related to expansion.
  '
In India, "Over 30 per cent of respondents feel that infrastructure is inadequate in supporting their business," the survey said.

More than three-fourth of respondents said there would not be enough infrastructure investment to support long-term growth of their organisations and governments should work more with private industry to finance infrastructure improvements.

 

Commenting on this KPMG's Global Infrastructure Practice Head Nick Chism said "these findings highlight widespread concern among global business leaders that governments need long-term strategies for infrastructure, adequately funded and backed by political will".

Meanwhile, a significant majority of respondents (90 per cent) said the quality and availability of infrastructure directly affect businesses and their operations.

The infrastructure segments which require utmost attention are roads and power generation and social services infrastructure, such as schools and hospitals.

The survey covered 328 C-level executives or board members from 21 countries, 47 per cent of them being CEOs.

Regarding infrastructure for power generation, 26 per cent of respondents said that the current state of affairs was adding greatly to their operating costs, while another 40 per cent claimed at least some negative financial effect.

The issue was acute in India where close to 90 per cent respondents stated that poor energy infrastructure burdens their organisations with additional costs.

Respondents in India pointed that rapid growth in the country over the past few years has considerably strained its infrastructure. India has not adequately considered building infrastructure ahead of demand, and has typically swung into action only when the bottlenecks become fairly apparent.

"Transportation and energy have been ranked as a high priority by corporates, the interesting observation is that social infrastructure like education and healthcare also finds place as a growth imperative," KPMG India Head of Infrastructure and Government Jai Mavani said.

Roughly nine in 10 respondents in emerging markets of India, Poland, Russia, and South Africa said current infrastructure investment is insufficient. In case of Western Europe it is 64 per cent, and North America it is 73 per cent.

"With our highly cerebral, educated, English speaking workforce, with a strong service orientation, there is no reason why we should not aspire to be the world leaders in education and healthcare just like we succeeded with IT and computer services a decade ago," Mavani added.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Mar 12 2009 | 5:33 PM IST

Explore News