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The 16th PwC Annual Global CEO survey reveals CEOs in India are worried about policy and regulatory uncertainty, exchange rate volatility, protectionism and corruption. The top three concerns of global CEOs are uncertain and volatile economic growth (81 per cent of global CEOs identified this as their biggest concern), government response to fiscal deficit (71 per cent) and over-regulation (69 per cent). This differed with the top three concerns of the Indian CEOs, who were more worried about protectionism, bribery and corruption, and exchange rate volatility. (Click on graphic)
Protectionist tendencies of national governments concern 71 per cent of CEOs in India compared to 51 per cent around the world. Protectionism is increasing around the world, and screening of FDI and M&As is becoming common. The second big worry for Indian CEOs has been the volatile rupee, which swung between 49 and 58 against the US dollar - 74 per cent of the CEOs in India were concerned about it. Bribery and corruption is also one of the top concerns. Seventy-four per cent of CEOs were 'extremely concerned' or 'somewhat concerned' about it.
In a recent report, Global Financial Integrity estimates that India suffered a black money outflow of $123 billion from 2001 to 2010, which places the country in the eighth position, next to Nigeria, with an outflow of $129 billion. Inadequacy of basic infrastructure concerned 75 per cent of CEOs in India, up from last year's 58 per cent. CEOs were equally concerned on tax compliance and retrospective amendments in tax laws. CEOs are more worried about the potential impact of social unrest and natural disaster which can be more disruptive than a slowdown in China or a break-up of the Euro zone.
