Indian CEOs prefer to cut costs to fuel growth: PwC survey

Almost three-fourth of Indian CEOs sure of growth prospects over next one year, versus 38% globally

Amid a high degree of optimism on their company’s growth prospects over the next 12 months, Indian CEOs are on a drive to cut costs and reinvest the savings to fuel growth, finds a survey of 106 CEOs from the country.

According to PwC’s 20th CEO Survey, almost three-fourth (71 per cent) of India’s CEOs are confident of their company’s revenue growth prospects over the next one year, as against 64 per cent last year.

Indian CEOs top on optimism*
India	71%
Brazil	57%
Global	38%
Asia Pacific	37%
China	35%
*Respondents who were 'very confident' on company's prospects for revenue growth over next 12 months

In terms of optimism, CEOs in India surpass their global counterparts (38 per cent) and their counterparts in China (35 per cent) and Brazil (57 per cent). Three-fourth of CEOs in India are confident of their company’s revenue growth prospects over the next three years.

The survey said a favourable demographic profile, rising income levels and urbanisation are some of the key factors driving the optimism sentiments in India’s growth story. A host of policy reforms, including the Goods and Services Tax (GST) are giving CEOs reasons to be optimistic about the overall business environment, the annual survey report said.

Around four-fifth of India CEOs polled (80 per cent) said they were taking steps to induce organic growth in business. Around 69 per cent of CEOs in India said they expect to cut costs and reinvest the savings to fuel growth.

Top CEO concerns in India*
Availability of key skills	87%
Uncertain economic growth	82%
Inadequate infrastructure	81%
Over regulation	81%
Speed of technological change	77%
Protectionism	64%
*Respondents who were 'somewhat concerned' or 'extremely concerned' about threats to organisation's growth prospects; Source: PwC's 20th CEO Survey; Base: India 106 (2017); Global 1,379 (2017)

Commenting on the survey findings, Shyamal Mukherjee, chairman, PwC India, noted that Indian CEOs are embracing the mantra ‘cut costs to grow stronger’ to unlock resources. “This shows that a transformational agenda is on the cards,” he added.

Among the top concerns of India CEOs are uncertainties about economic growth and over-regulation.  This year 82 per cent of CEOs in India expressed concerns about uncertain economic growth, while 81 per cent were concerned about over-regulation. Around three-fourth of CEOs (64 per cent) are concerned about protectionism as opposed to 59 per cent globally. Inadequate infrastructure and lack of availability of key skills continue to be major concerns for corporate India.

In the survey 38 per cent of India CEOs noted that over the past five years disruptive technological innovations have had a significant impact on competition within their respective industries. Almost half of CEOs polled (47 per cent) believe that in the next five years disruptive technological innovations will have a significant impact on competition.

More than three-fourth of CEOs polled (81 per cent) stated that it is important to have digital skills and that 66 per cent have already added digital training to their organisations’ learning programmes.