From being cautious to being optimistic, India Inc’s business sentiments are drawing closer to pre-pandemic levels, hinting at a more robust performance in the next quarter, a Grant Thornton Bharat Survey said on Wednesday.
The government’s move to make taxation transparent has been considered as its most impactful initiative (40 per cent), followed by the Production Linked Incentive (PLI) scheme (30 per cent), equalisation levy (20 per cent), and new labour codes (10 per cent), as per the survey findings.
The survey was carried with 3,700+ respondents across digital platforms, hinting at the rising global and domestic optimism related to revenues in 2021.
Six out of 10 respondents feel that reducing the tax and compliance burden will help revive businesses post the second Covid wave. An uptick in direct spending, followed by additional liquidity infusion and increased FDI flows, respectively, are also some of the other relief packages that the respondents feel could help boost cross-border and domestic trade.
“The reduction in the corporate tax rates, attempts to reduce litigation through dispute resolution schemes, bringing in more transparency through various tax administrative reforms, boost to the MSMEs through various policy initiatives, are all yielding results and adding to the positive business outlook in India,” said Vikas Vasal, national managing partner (tax), Grant Thornton Bharat.
The survey also noted the impact of Covid-19 on businesses. Half the respondents (50 per cent) feel the second wave of the pandemic has had a devastating effect on businesses and economy, while the remaining feel that the second wave was either not as bad as the first one or there is hope for recovery in the next two quarters.
Effective change management in business strategies, not just re-structuring of businesses, has also put the focus on integrating sustainability and ESG into corporate business strategy as stakeholder activism and reputation management gain more ground.
The survey by Grant Thornton Bharat revealed that 61 per cent of the respondents agree to assimilate ESG into the core business agenda. The focus has shifted from profit accumulation to building sustainable and resilient business models, which will not only test the waters, but also survive and continue to grow in the long run.
While 18 per cent hint on reducing their focus on ESG and sustainability, 16 per cent feel Covid-19 has not led to an increased focus on ESG.
A small section of 5 per cent of the respondents have already assimilated ESG and sustainability goals into their overall business approach.
“No future/forward thinking organisation can ignore the sustainability revolution and it is evident from the survey report.
“As sustainability and ESG grabs eyeballs, this needs to be understood for its long-term value creation. Addressing the risks, envisioning achievable targets and investing in the right strategy will be key in invoking a sense of shared ownership,” said Dinesh Anand, Partner, Grant Thornton Bharat.