India is ranked number two on Grant Thornton’s Business Optimism Index in the second quarter of 2017. The Grant Thornton International Business Report (IBR) said that the confidence in Indian businesses is backed by a buoyant economy and continued reforms.
According to the IBR survey, India’s ranking has gone up from fourth to the second position in Q2. 94 percent of the surveyed businesses are confident about the growth of the Indian economy.
India was also second place on the expectation of profitability, with 69 percent of the respondents expecting higher profitability, thus, bringing India on the second position on the chart from the sixth in the last quarter.
“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 are giving a further push to optimism,” said Harish HV, Partner – India leadership team, Grant Thornton India.
“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,” he said.
Meanwhile, China is lagging behind with only 48 percent businesses displaying confidence in its economic growth.
India reports only 34 percent of the businesses expecting an increase, reflecting the weakening Information Technology (IT) exports, while the Asia Pacific (APAC) region witnessed an increase in exports expectations. India has also slipped to fourth position from the third in the last quarter in ranking for employment expectations.
The Indian economy has seen a consistent dip in employment which continues to be a worry for the Indian economy. Only 51 percent expected a rise in employment in Q2 2017, compared to the 56 percent and 62 percent in Q1 2017 and Q4 2016, respectively.
Globally, companies are positive on business prospects with an all-time quarterly high of 51 percent in Q2, making it the fifth consecutive quarter of optimism. Companies in the US, European Union and China are more confident with 81 percent, 50 percent and 48 percent, respectively, businesses optimistic on future prospects.
The IBR survey is conducted on a global scale with 2,600 businesses from 37 economies participating in the activity.