A survey conducted by Grant Thornton has stated that Indian business continues to be optimistic backed by a buoyant economy and continued reforms.
According to the Grant Thornton International Business Report (IBR) survey, India's ranking has rallied from fourth to second position on the optimism index in the second quarter of 2017. The IBR finds that 94 per cent of Indian businesses are confident of India's economic growth story. While India continues to rise on the optimism index, China is still struggling to build the business confidence with only 48 per cent businesses displaying confidence in the economic growth for the second consecutive quarter.
The survey noted that the report was prepared on the results of a quarterly global business survey of 2,600 businesses in 37 economies.
While only 52 per cent respondents expect the selling prices to increase as against 55 per cent in the last quarter, India saw a jump of two places in the ranking for this parameter to 4th position from 6th in the previous quarter. The report said that this may be nullified by the GST implementation.
"After a slight dip in Q1, India is climbing the optimism charts faster, ranking second on the index this quarter. Indian businesses expect an increase in selling prices and higher revenue, both reflected in the booming stock markets. The Government continues to bring in transformational reforms such as GST which has given a further push to optimism. The only worrying factor is the weak outlook on employment which we hope will give impetus to labour reforms. The other area which also needs to be addressed is exports," said Harish HV, Partner – India leadership team, Grant Thornton India LLP, in a press release.
The survey further stated that India also topped the chart on the ranking for revenue expectations with 78 per cent of the businesses in India expecting an increase.
"As far as the profitability expectation goes, 69 per cent of the respondents expect higher profitability, thus, bringing India on the 2nd position on the chart from 6th position in the last quarter. While the APAC region has witnessed an increase in exports expectations, in India, there hasn’t been any significant rise on this parameter. Only 34 per cent of the businesses surveyed expect an increase in exports. This reflects the weakening sentiment on IT exports which may have caused this dip," the IBR survey said.
The report, additionally, has shed light on employment expectations in the country. India has slipped to fourth position from third in the last quarter in the ranking for employment expectations.
"There is a consistent fall in the employment expectations ranking in the last three quarters with 51 per cent expecting a rise in employment in Q2 2017 compared to 56 per cent and 62 per cent in Q1 2017 and Q4 2016 respectively. This continues to be a worry for the Indian Economy," the survey said.