PwC: CEOs see infra woes in India threat to growth
January, 27th 2011
As India tries to embark on a double-digit growth path, many CEOs feel that inadequate basic infrastructure could hamper country's economic expansion programme, says a global survey of consultancy firm PwC.
"... 88 per cent of CEOs (in India) told us the inadequacy of basic infrastructure was a threat to growth," said the PwC report, which was released at the World Economic Forum (WEF) here.
The findings are part of the survey which is based on responses from 1,201 chief executives from 69 countries. A majority of those surveyed opined that government leadership in building infrastructure is critical for ensuring competitiveness of countries.
India, one of the fastest growing economies, plans to invest as much as USD 1 trillion in infrastructure in the five-year period from 2012 to 2017. Nearly half of the investment is expected to come from the private sector.
A recent WEF report said that annually USD 3 trillion needs to be spent on infrastructure development worldwide.
India is likely to achieve about 9 per cent growth rate during 2010-11 and is aiming to breach the double-digit barrier in the coming years.
Meanwhile, about 70 per cent Indian CEOs, who participated in the survey, believed that their company's total tax contribution would rise since their government is exploring ways to bring down fiscal deficit.
The report noted that "70 per cent and 63 per cent of CEOs in India and Brazil,respectively," felt that their tax contribution would rise.
Going by the survey, about 15 per cent CEOs opined that they would source their supplies from India, considering the country's cost competitiveness.
On the other hand, as many as 84 per cent of respondents said they have changed their company's strategy in the past two years, primarily due to divergence in the global economy.
When it comes to growth, 92 per cent of Western European CEOs expect growth in their Asian operations, while only 48 per cent expect growth in their Europe operations.
"... CEOs from Asia-Pacific and Latin America were more likely to expect growth in their own regions than elsewhere," the report noted.
As per the survey, two-thirds of CEOs believed they are facing a limited supply of skilled candidates, especially as they establish a long-term presence in key emerging markets.
"CEOs are changing their people strategies to improve employee engagement and retention. Most CEOs (65 per cent) say they plan to use more non-financial rewards," the report said.