India most optimistic

By SiliconIndia   |   Friday, 17 August 2007, 07:00 Hrs
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Bangalore: As business owners continue to ride on the optimism of overall environment helping their pursuit, India will prove cynics wrong on its economic prospects for the coming year.

According to the Grant Thornton International Business Report 2007 (IBR) survey on economic prospects for the year ahead, in spite of worries of inflation and shortage of long-term finance for expansion and slight dip in exports, India tops the table as the most optimistic country for the fourth consecutive year. The survey was conducted among 7,200 businesses in 32 countries in 6 continents.

Its optimism/pessimism balance of +97 percent was much higher than many countries. Where as Japan recorded a balance of minus five percent. Businesses in the UK are significantly more optimistic about 2007 at +43 percent than they were in 2006 at +8 percent.

There is a strong GDP growth; increase by 0.4 percent during FY 2006-07 at 9.4 percent, strengthened by fixed investment at 11.3 percent gave an impetus to expansion of industrial production to 11.5 percent last year. Only the inflation rate raised the hackles at 6.7 percent, resulting in tight money policy.

The IBR examines the attitudes, plans and trends of 7,200 businesses in 32 countries across six continents. IBR builds on data collected in previous surveys and boasts of a 15-year trend data for EU countries and 5-year trend data for international participants.

Expected employment growth in India has risen from 2006 (+69 percent) to 2007 (+74 percent), 29 percent more than the global average of +45 percent.

However, stress level was higher at 79 percent compared to 57 percent in 2006, significantly more than businesses globally (56 percent). Also Indian business owners reported the longest working hours per week globally at 57 hours.

The proportion of Indian companies exports has come down seven percent from last year to +31 percent and lower than the global average of 34 percent.

Globalisation is likely to be seen more as an opportunity (82 percent) than a threat to business (nine percent), well above the global average (55 percent).

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