New Delhi: Indian business leaders continue to be the most optimistic lot globally about the country’s economic outlook for the second consecutive quarter owing to a strong GDP growth, recent policy announcements and regulatory changes, says a report.
According to the Grant Thornton International Business Report(IBR) a quarterly global survey of 2,500 business leaders across 36 economies, 90 per cent of the respondents in India expressed confidence in the country’s economic outlook.
“India once again is on top of the charts in terms of optimism and is clearly the one bright spot in the global economy. We believe this shows the optimism of the Indian businesses based on the several initiatives by the government,” Grant Thornton India Partner – India Leadership team Harish HV.
During the first quarter of the year, the country also topped the chart on expectations of an increasing revenue at 88 per cent and employment (67 per cent).
However, Harish said that there are a number of actions and initiatives that are pending.
“For India to continue to achieve the planned success there is a need to focus on key reforms such as the proposed Goods and Services (GST), other related tax reforms and simplification of laws.”
The report said while there is rise in business confidence in India, the country ranks number two after Greece in citing regulations and red tape as a constraint on growth.
“Within the survey, 63 per cent of the respondents indicated these as constraints. However, the good news is that there is a significant decrease in the percentage from last quarter where 74 per cent cited red tape as a key constraint and India ranked number one on this chart,” it added.
The survey also finds that shortage of finance is the biggest concern for India Inc followed by ICT infrastructure and shortage of skilled labour.
Optimism dropped to third position during the quarter in selling prices (60 per cent) and profitability (73 per cent) categories, it said.
The report also showed that Indian businesses are most optimistic about investment in new building with 51 per cent respondents expecting the investments to go into the segment.
Another key highlight of the survey is that there is a drastic fall in optimism for increase in investment in R&D and export.
While, only 31 per cent expect an increase in R&D activities compared to 51 per cent in the previous period, a small 13 per cent foresee a rise in exports which was 28 per cent during the previous quarter.
On the global front, business optimism fell to 26 per cent during the quarter, the lowest since the last quarter of 2012.
The report said that the trend is evident across the globe with G7, EU, North America, Latin America and Asia Pacific, all recording a slide in optimism.