Indian entrepreneurs have retained their place as the world's most optimistic business owners for the fourth year in a row on the back of continuing economic reforms, global business advisory firm Grant Thornton said in a new report.
Business owners have taken full advantage of economic reforms and liberalisation of international trade and remain confident this would continue to drive the economy, Grant Thorton's International Business Report (IBR) said.
"Reforms since the early 1990s have helped unlock India's economic potential and positioned India as one of the fastest growing economies in the world. Growth is accelerating, boosted by a dynamic, knowledge-based service sector and expanding manufacturing sector.
"No wonder, for the fourth successive year, Indian businesses continue to be the most optimistic in IBR about economic prospects," Grant Thornton India's Vishesh Chandiok said.
The outlook for the Indian economy over the next one year remains extremely optimistic. India was followed by the Philippines and mainland China. Business owners in Japan and Taiwan remained generally downbeat about economic prospects over the next 12 months.
The optimism/pessimism balance in India has reached over 97 per cent as compared to 93 per cent last year, an exceptionally high balance reflecting the rapid progress achieved by Indian economy in recent years, the report said.
Three other Asian economies - Philippines, China and Singapore - also display strong optimism, with balances over 80 per cent as they made rapid progress.
India also leads in terms of key business performance expectations such as turnover, employment and profitability, the Grant Thornton report showed.
The county is at the top in terms of turnover with 92 per cent balance, which is the difference between the proportion of businesses indicating expected optimism and pessimism. It has 81 per cent balance in profitability and 74 per cent in employment for the next 12 months.
With turnover rising rapidly in India and China, job growth and profitability are expected to be strong and the rapid pace of expansion is stimulating investment spending.
India is expected to retain its position at the head of the employment creation league over the next one year, boosted by a vibrant private sector and increased public spending. Other economies with expectations of very strong employment creation are the Philippines, Armenia and China.
Interestingly, the report reveals that unlike other emerging markets, business owners in India view financial constraints as less of a barrier to growth, particularly with regard to a shortage of working capital. Only 20 per cent of respondents in the country considered this a major constraint on expansion, the report reveals.
Respondents in three out of the four BRIC economies regard the cost of finance, shortage of working capital and long-term finance as key factors constraining business growth.
Among the BRIC (Brazil, India, China and Russia) economies, expectations for business performance were generally buoyant and well above global average, it said.
India is in the top three countries in all business performance indicators except for exports and investment in plant and machinery.