Optimism level of mid-market Indian business leaders have seen a dip of 10 percentage points in the second half of 2019 as compared to the first half but have displayed cautious optimism while entering 2020, says a report.
Grant Thornton’s International Business Report said with recent slowdown in real gross domestic product growth to below 5 percent, optimism level of mid-market Indian business leaders has seen a dip of 10 percentage points in H2 2019 to 69 percent from 79 percent in H1 2019.
However, despite the challenges, optimism levels for the Indian economy remain well above global levels of 59 percent, it added.
“Mid-sized businesses are the cornerstone of India’s economy. Contrary to popular belief over 75 percent are positive about the policy changes and progress on EoDB (Ease of Doing Business), or at least that’s what they are telling us!,” Vishesh C Chandiok, chief executive officer, Grant Thornton India LLP said.
The report released on Thursday also said 79 percent of business leaders surveyed in India believe the government has taken enough measures on the policy front to enhance ‘Ease of Doing Business’.
“While 77 percent agree that Goods and Services Tax has achieved its objective of simplifying indirect tax regulations in India, 61 percent of business leaders feel Insolvency and Bankruptcy Code was a step in the right direction and has achieved its purpose,” it said.
Further, 79 percent of mid-market business leaders surveyed believe the government had taken enough measures to provide clarity on the tax front for investors in India,” it added.
On growth expectations, 72 percent of the business leaders surveyed expect an increase in revenue and 64 percent feel profitability will increase in the coming year.
Grant Thornton’s IBR also said 66 percent of those surveyed expect an increase in employment in the coming year.
“Business leaders expectations for investment in India remains strong. India ranks 4th globally in terms of investment expectation in technology, with 72 percent of business leaders expecting an increase in technology investment over the next year. 66 percent of business leaders also expecting an increase in R&D investment,” according to the report.
Economic uncertainty, regulations and red tape, and shortage of skilled manpower remains a concern with over 60 percent of respondents considering these as constraints to expanding business, it added.
The survey gathers responses bi-annually from 10,000 business leaders in 32 economies including the G-20 and surveys 250 respondents in India.
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