Exchange volatility biggest fear for India's CEOs: PwC

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Pricewaterhouse Coopers (PwC) has released its 13th Annual Global Chief Executive Officer (CEO) Survey assessing the mood of corporate India and providing the insight into India's competitiveness. They conducted a survey of nearly 62 CEOs from large Indian companies. The verdict is clear that India Inc is feeling confident even if the world recovers from its worst global economic downturn in 75 years.

In an interview with CNBC-TV18, Jiraj Purandare, Executive Director of PwC, spoke about the survey conducted with CEOs and the findings from it.

Here is a verbatim transcript of an exclusive interview with Jiraj Purandare on CNBC-TV18. Also watch the accompanying video.

Q: The mood has changed since this survey was conduced in September last year. How confident is India Inc feeling now? What is the basis of this confidence?

A: Due to what happened a year ago around the world, India felt that it was decoupled. Soon towards the end of the year, we realized that it has hit all of us in India. However, since there was a dip in the confidence, we are finding that the survey we carried out just a couple of months ago, covered about 62 CEOs of many corporations across the range of industries in India. We also found that 63% of those are very confident that the turnaround in India is already under way. Another one third of those CEOs, that we covered, believe that in next six months India will see a turnaround. Hence, a very high proportion of CEOs believe that they will see stable and strong growth over the next six months.

Q: Where does India actually stand in comparison to Brazil, Russia, India and China (BRIC) countries, because I believe the survey throws up an interesting insight here?

A: Out of 133 countries which were surveyed, China is certainly higher at 29 and India is ranked at 49. We are ahead of Brazil as well as Russia. India is second - still a little distance away from China. However, we have known from the survey that there is some good strength while there are improvement areas as part of the 12 factors which go into determining competitiveness.

Q: The manufacturing sector which has gone through a significant downturn has in fact improved in terms of competitiveness as compared to services. Is that right?

A: Absolutely. One of the clear finding from our survey was that the CEOs felt that there is a huge opportunity for the manufacturing sector. About 43% of the CEOs believed that India has become far more competitive, compared to the last year, in manufacturing. So obviously, CEOs do believe that manufacturing can be a great compliment in terms of the services.  

Q: The survey has also highlighted a number of risks and the number one risk that India Inc is worried about, is the volatility of the exchange rate. What are some of the other risk that you have outlined in your survey?

A: I suspect that the particular factor which came up is more short term and is due to what happened over the last year with some Indian corporates. The two other main factors coming up quite clearly relates to protracted global recession. Therefore, I believe that the Indian users are worried whether advance economies around the world are going to come out of recession quickly or not. The second part relates to over regulation. In ragards to what has happened, the worry for it is whether there will be greater protectism or not.