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CFO Survey, February 2013

Cautious Optimism

A survey of 136 Indian CFOs by Deloitte India reveals:

  • 62% of the CFOs express optimism about the future state of the Indian economy over longer term
  • 49% of the respondents consider inflation, political direction towards economic reforms and increased commodity prices as key economic concerns
  • 47% consider availability of people, changing cost structures, and pricing trends as their key  industry specific concerns
  • 34% believe their organisations will perform better over the next quarter, 12% are apprehensive about poor performance while the rest expect  no significant change in the performance of their company going forward
  • 54% believe revenue growth/preservation, cost reduction, and maintenance of talent pool  are key organisation specific challenges
  • 66% indicate Eurozone instability, slowdown in Chinese economy and increase in FDI as key global events that impact their organisational  performance

New Delhi, 21st February 2013: Deloitte Touche Tohmatsu India Pvt. Ltd. has released its “Deloitte India CFO Survey 2013”, a pulse survey that reflects the opinions of Indian CFOs on a range of areas including economic outlook, financial markets, business trends, their organisations and CFO careers. Around 136 CFOs of listed and unlisted companies, across sectors, participated in the survey.

62% of the CFOs express optimism about the future state of the Indian economy over the longer term. However, they continue to remain uncertain about the short term impact of the government’s recent policy reforms such as increased incentives for investors (in sectors such as insurance, pension, multi-brand retail), reducing subsidies (oil), and the proposed disinvestment of public sector units (energy, natural gas). 57% of the CFOs are neutral (neither optimistic nor pessimistic) about the current economic condition of India, whereas only 18% are optimistic.

According to Sanjoy Sen, Senior Director, Deloitte in India, “The optimism and sentiments expressed by the CFOs indicate that they are exhibiting caution regarding the present state of the Indian economy. Their apprehension arises from the recent slowdown of GDP growth, consistently high rates of inflation and a widening fiscal deficit, key factors that have far-reaching implications on investor confidence. Although the CFOs are concerned with the current economic conditions, their level of optimism is significantly higher for the future.” Regulations to encourage foreign investors, subsidy cuts to reduce the fiscal deficits, and moderate interest rate cuts to fuel the economy, are viewed as key drivers for a positive outlook.

The CFOs consider recent regulations, that encourage Foreign Direct Investment (FDI) inflow, tax reforms (such as proposed General Anti Avoidance Rule (GAAR) amendments), and reduction of fuel/non-fuel subsidies as key positive enablers that enforce their future optimism. However, it needs to be seen how well the government maintains this momentum with adequate policy interventions where necessary, and, consequently, how well the economy performs in the coming months.

Over 45% of the CFOs continue to express concern over changing cost structures, inflationary pricing trends, industry regulations, and unavailability of adequate skilled resources as key economic concerns. Although the CFOs still look forward to government intervention to address the current industry concerns, they also consider other factors (skill set unavailability, cost structures and pricing trends) as equally critical. Industries such as Banking, Financial Services and Insurance, Energy and Resources, Consumer Business, Life-Sciences & Health Care, Technology, Media and Telecommunication, and Manufacturing sectors continue to be affected by the lack of capable and skilled labor force.

Over half of the CFOs indicated revenue sustenance, cost reduction and maintenance of talent pool as key organisation-specific challenges. Of these, revenue growth/preservation continues to be major concerns (similar to the 2012 survey) due to low consumer demand (domestic as well as international). At the same time, profitability and margin maintenance remain key challenges due to the elevated input costs, asset/working capital management challenges, complex corporate tax environment, increased regulatory compliances, and liquidity maintenance (with adequate financing). Moreover, talent related areas such as availability of specialised or skilled workforce, their development and associated cost remain key areas of concern for the CFOs.

CFOs are faced with the continued need to grow/preserve revenue, implement cost containment initiatives, generate value for shareholders, make prudent use of capital, and maintain investment-grade value. In addition, CFOs may also have to continuously engage in organisational streamlining activities, such as increasing operational scalability, consolidating their businesses and improving access to resources and capabilities to improve their working capital usage efficiency.

To read the full report please click on CFO Survey, February 2013

Notes to the editor
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK Private Company Limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity.  Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Deloitte provides audit, tax, consulting and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte’s more than 182,000 professionals are committed to becoming the standard of excellence.


In this press note “Deloitte in India” refers to Deloitte Touche Tohmatsu India Private Limited, which is a company established under the Indian Companies Act 1956.

This press release has been given by Deloitte Touche Tohmastu India Private Limited

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