You are here: Home » Budget » News
Business Standard

CEOs expect Budget 2021 to kick-start next wave of investment cycle

Companies plan to hire more, expect staff to return to offices in new year

Indian Economy | CEOs | Indian companies

BS Reporters  |  Mumbai/New Delhi/Kolkata/Bengaluru 

auditor, audit, companies, taxes, investment, shares, savings, investigation, prove, financial
The Budget will be the key as CEOs are expecting the government to dole out more incentives.

With a tumultuous year behind them, chief executive officers (CEOs) in India are eyeing the 2021 Budget to help kick-start the next wave of the cycle, which was hit by the pandemic.

Backed by several steps taken by the government and the Reserve Bank of India (RBI) including the debt moratorium scheme, the are expecting the economy to show growth next fiscal year if India succeeds in its vaccination drive.

A survey of 33 across India in December shows that almost 73 per cent of the respondents plan to invest more in the new year even because they expect their employees to return to work as the country rolls out vaccination in January.

The Budget will be the key as are expecting the government to dole out more incentives.

“The government was prompt in listening to industry after the outbreak of the pandemic, and its multi-billion-dollar economic package will be helpful in long-term demand revival,” said the CEO of a consumer products company.

Another CEO said the government tried its best on every front to counter the crisis. However, investing in a new Parliament building and the bullet train was avoidable, the CEO said.


When asked about the lessons from the crisis, the CEOs said the “black swan” events could happen anytime and hence companies must remain prepared.

“We have to look after our employees because they will manage the business during difficult times,” said a CEO.

The survey showed almost 40 per cent of the respondents cut staff costs in 2020 but the silver lining is that 80 per cent of the respondents were planning to hire in the new year.

Despite the pandemic, the average capacity of companies was 87 per cent, showing their fast turnaround.

A majority of the CEOs are expecting the economy to show growth in the next financial year on the back of rising consumer spending and a sharp turnaround in rural India.

About 79 per cent of the CEOs said rural India would be the main factor in economic growth as evident from rising sales of tractors and automobiles.

“Rural India has been resilient through the worst of this crisis, registering growth even as the rest of the economy suffered,” said a CEO.

When asked whether they expected the RBI to cut interest rates further in 2021, 58 per cent said they did not do so.

The RBI had cut interest rates several times to a nine-year low since the onset of the pandemicbut decided to keep its repo rate unchanged in the December policy to 4 per cent owing to inflation fears.

“We have low borrowing rates and low personal taxes,” said another CEO. “However, banks pass on the low rates,” he added.

Apart from inflation as a major risk, the CEOs said the rollout of vaccination would be the key in economic revival.

The unabated performance of the stock markets will continue next year, they said.

The Sensex closed the year at 47,751.33.

On the performance of the Indian currency, 58 per cent said the rupee would trade below Rs 76 to the dollar by the end of December 2021.

When asked about Atmanirbhar Bharat (self-reliance) schemes, 85 per cent said it was a step in the right direction and would go a long way to help

“It was an appropriate move. For the power sector, this package helped in alleviating the stress of distribution companies,” said the CEO of an electricity generation firm.

Another CEO said Atmanirbhar was a good idea which needed to be developed further and there should be a minister of Cabinet rank to make it happen.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, January 01 2021. 06:10 IST