Indian businesses most optimistic on economic revival in 2017
India has emerged as the most optimistic country globally in terms of business optimism as the country’s businesses are high on expectations of increasing revenue, employment, profitability, says a survey. According to the latest Grant Thornton International Business Report (IBR) survey, Indian businesses are the most optimistic about economic recovery in 2017.
“India continues to stand out as the one economy which has huge potential to continue to grow and this is reflected in the survey where Indian businesses are most optimistic and high on expectations of increasing revenue, employment, profitability,” said Harish H V, Partner India leadership team, Grant Thornton India.
India had ranked second on the optimism index during the third quarter (July-September 2016) and has leaped to first in the December quarter, with 88 per cent of the respondents voting for it. India tops the chart on expectations of increasing revenue (89 per cent) where it slipped to third position in July-September.
Harish noted that this is “a great time” for policymakers to look at unleashing the next generation of reforms, apart from GST, mostly focused on ease of doing business and minimum government, maximum governance.
“That requires a change in mindset among policymakers and implementing reforms in the legal system and contract enforcement. There is an overall increase in global optimism which augurs very well for India in terms of attracting investments and providing markets for Indian products and services globally,” Harish added. The country also ranked number one on the parameters of employment expectations (62 per cent) and selling prices (68 per cent). India Inc’s profitability expectations further moved down to the second position from rank three in the third quarter.
Globally, business optimism at the end of the fourth quarter of 2016 stood at a net 38 per cent, up five percentage point from its previous quarter and the highest level since July-September of 2015.
“We have clients in over 140 countries and... can say uncertainty was the business buzzword of 2016, and much of that came from Brexit and the US presidential election. That uncertain period is gone now, and knowing the results will allow businesses to have a clearer steer on such key issues such as taxes, jobs and trade policy,” said Francesca Lagerberg, Global leader at Grant Thornton. The scale and the report are prepared on the basis of results of the quarterly conducted global business survey of 2,600 businesses across 37 economies.
Domestic IT spend to grow 13% at Rs 2.14 lakh crore this year
India’s domestic IT spending is estimated to grow at 12.9 per cent to Rs 2,14,012 crore this year, helped by government's push for digital services, a report has said.
Spending in the category grew at 12.3 per cent last year, against a prediction of 13.5 per cent, according to the annual research report by Coeus Age Consulting.
"The domestic IT spending has been gradually picking up since its lowest in 2013. This is supported by the emerging strength of fundamentals in the Indian economy, despite the global challenges," Coeus Age Consulting founder and CEO Kapil Dev Singh said.
With the new tax regime becoming a reality and a massive push by the government on digital, the growth shall pick pace by 2018, he added.
The performance in 2016 has been below the estimates given the delays in GST implementation and passing of other key economic legislations, the report said adding that the stage now seems to be set for their implementation and emergence of a "supportive business environment".
"The passing of Aadhaar Act, 2016 to spur eGovernance initiatives and the massive push by the government on digital economy, the IT and digital spend will receive a major boost in 2017 and beyond," it said.
The spending on digital (social, mobile, analytics and cloud) by the enterprise and government sectors is expected to grow at 43 per cent to touch Rs 38,522 crore in 2017, accounting for 18 per cent of the overall IT spend.
"The initial flirting with digital technologies in a piecemeal manner is giving way to serious building of digital and converging it with the underlying IT infrastructure and applications," Singh said.
The transformation journey for many Indian enterprises shall begin in 2017, which shall spread to become mainstream in the coming years, he added.