Hope for increased healthcare spending, recapitalisation support for ailing firms in Budget 2021: PwC India Chairman Sanjeev Krishan

In a free-wheeling chat with Moneycontrol’s Ashwin Mohan, Krishan elaborates on his strategy for the India operations, the digital shift, M&A trends in 2021 and his wish list for the Finance Minister’s next budget.

Three decades and a lifetime of opportunities, that is how I can describe my journey in the firm. What can I say, I have been extremely fortunate to have had the best of mentors who guided me all the way through. The learning and the camaraderie, the excitement and the rigour - every day at work, without exaggeration, has been very fulfilling for me. I am very humbled to have been given the opportunity to lead the firm and am committed to do my best to steer our partners and people to live up to the expectations from our legacy organisation.

To say that 2020 has been a challenging year is an understatement. It has been like nothing we have experienced before, thought of or prepared for. But like every crisis, it has taught us valuable lessons that have led to a lot of rethinking and reconfiguring, for us as individuals and as organisations. Our priorities are much clearer now. In the short to mid-term, I would like to focus on enhanced communication with our people and clients to gauge how better we can support them in the current context.

Internally, I would like to focus on how we can further empower and enable our people with the right digital tools and solutions which will help them be productive and deliver high-quality work to our clients - this will help build greater relevance for us in the marketplace, which in turns embellishes the brand.

To me, planning for growth is more to do with how we position the firm for long-term success. It is about the viability of the institution. So I'm more excited today than I have been in a long time in terms of where these opportunities are.

The challenges that are out there, when translated into opportunities, are really energising. When we think about what our clients are going through during this pandemic, how they deal with the environment, how they're dealing with megatrends that the world is familiar with, whether it is the shifting of the global economic balance to developing countries, dealing with technology, these are really exciting times.

My role is to ensure that the firm is thinking of those big issues, making sure that we've got the skills and capabilities within the firm to help our clients deal with them. Also, we want to be known for quality, as the most trusted advisors to our clients, for top talent and as a people-friendly future-ready workplace. I believe if we can take care of these two aspects, business and consequently growth would follow.

Yes, I have been a deals professional for nearly 25 years and am very proud of the work that PwC India has done in the space. We were among the first firms to establish a Transaction Services practice in India back in the 1990s and have since then significantly grown and established a strong market presence. We also developed a strong Private Equity (PE) practice with a focus on asset classes ranging from traditional PE houses to Sovereign Wealth Funds, Venture Capital and Distressed Funds.

We want to be known for quality, as the most trusted advisors to our clients, for top talent and as a people

-friendly, future-ready workplace.

We have been ranked as the top transaction advisors for private equity transactions for the last 6 consecutive years (2014 – 2019) as per the Venture Intelligence league tables (including due diligence, tax and other advisory services). We also topped Venture Intelligence’s league tables for M&A in 2019. Considering the market landscape and client needs, we launched our Business Restructuring Services (BRS) vertical a few years ago.

And more recently, with a growing focus on value conservation and creation, we established our Value Creation in Deals (VCiD) platform. In addition, we rolled out the Deals platform in mid-2019, in which about 8 deals teams sitting across our lines of service, including Transaction Services, Valuations, Corporate Finance, BRS, Value Creation in Deals and Delivering Deal Value, M&A - Tax, Financial Services - TaxTax, and the Regulatory advisory team came together to seamlessly support our client’s journey through the entire deal continuum. Our Deals platform today has over 50 partners and nearly 1,000 supporting team members.  We have some exceptionally talented partners in the practice and you’d hear more on this soon.

Consolidation continued to drive M&A activity in India, accounting for nearly 50 percent of the total deal value this year. Given the volatility, uncertainty and complexity of the current times, we expect this to be a continuing trend. With emerging stressed situations, corporations would possibly look to hive-off non-core assets in an effort to retain profitability or address cashflow challenges.

Healthcare and Pharmaceuticals saw significant investment interest this year, including from Private Equities. This is likely to move to the ancillary sectors.  Anything Tech and Digital also had significant interest and we see activity at two ends - at the top end some of the large businesses may look for listing in India / overseas causing some PE exits, at another it is heartening to see that the startup ecosystem continues to stay robust and many have found funding - this will enable the culture of innovation to flourish.

Also do expect the Manufacturing sector to see some revival as the private sector investments start at some point in time.  The government has been coming up with a number of incentives, including the PLI scheme, land and labour reforms and the whole focus on Atma Nirbhar Bharat.  These will help.  Would also like to see support and encouragement for the mid - corporates as they are an important component of the supply chain and/or distribution cycle and also very significant employment generators.

The pandemic has reiterated the need for increased spending on healthcare. Our primary healthcare infrastructure needs significant improvement. The envisaged 2.5 percent of GDP spending is still a far cry from the current 1.3 percent allocation and I hope FM will look at a staggered improvement in the spending allocations.

Also, I am expecting the focus on Make in India to continue, whether by easing capital flow - both debt and equity to manufacturers, or sops for investments made in the sector - similar to angel investor benefits - creating funds for funds etc, as that can help boost growth.

The pandemic has reiterated the need for increased spending on healthcare. Our primary healthcare infrastructure needs significant improvement. The envisaged 2.5 percent of GDP spending is still a far cry from the current 1.3 percent allocation

Any support towards recapitalisation of institutions that will help businesses come out of the crisis, would also be a welcome step.  And lastly, the focus on skilling and innovation - because that is what will help us be self-reliant. Measures to sustain the thrust on skill upgradation and improving formal employment opportunities would be key to India overcoming the impact of the current disruption.