As the year begins anew, hope springs eternal in all walks of life, as it does for India Inc. And a slew of factors, such as strong corporate earnings, higher consumer spending, and robust Foreign Direct Investment, are giving CEOs across the length and breadth of India much cause for optimism.
A survey conducted by Business Standard among 22 CEOs across the country last month showcased the buoyant sentiment of Indian leaders, with a majority prepared to hire and invest more in the coming year on the back of a rosy growth outlook for 2024.
Inflationary and interest rate pressures are certainly factors to be wary of, but CEOs of India Inc. don’t believe it will stymie FDI inflows in 2024, with some 95% of leaders believing it will continue to be robust on the back of enabling policies and growing ease of doing business.
Additionally, some 64% of CEOs believe rural demand will see an uptick in 2024 owing to an easing of inflation and increased liquidity among rural households. This recovery in earning levels was somewhat nascent in 2023, which will be more pronounced in the year ahead.
With 2024 being an election year, CEOs have their wishlist at the ready for the government. Unsurprisingly, the focus is on creating world-class infrastructure, and it seems that this is a focus area that will be met, with the Union Budget 2023 allocating ₹10 trillion, or 3.3% of GDP, for infrastructure development. This figure represented the highest figure in the past four fiscal years, and the growth momentum surrounding infrastructure will no doubt be given greater impetus in the months ahead.
The creation of employment opportunities is also high on the wishlist of India Inc., and this is something that is likely to come to pass with the rise of Generative AI and data propelling the skilling ecosystem. For their part, nearly 73% of the CEOs surveyed were willing to walk the talk and show greater hiring intent across roles.
Meanwhile, when it comes to appraisals, nearly 86% of leaders said the annual hike for their employees will be less than 20%. This is in line with industry sentiments as per Willis Tower Watson’s latest ‘Salary Budget Planning India Report’, which predicts the median salary increase in India to be 9.8% in 2024. This aligns closely with the levels of average salary increases seen in 2023, which was 10%.
According to Anand Rathi, corporate earnings are expected to be strong in the year ahead, at 10-15% for large caps and 15-20% for mid and small companies. This sentiment is mirrored by those polled, with almost 64% of CEOs expecting their company’s earnings to grow over 20% in the new year. Largely, the price to earnings ratio for mid and small caps are in keeping with long-term trends.
On the topic of strong earnings, there seems to be a sense of positivity around the rupee as well, with some 68% of CEOs expecting the rupee to trade between 83-85 to a dollar. This can be put down to the sound macroeconomic environment around India, and some expected rate cuts by global banks after a period of things trending upwards last year. Of course, a lot will also depend on the impending elections, but that is something that will only come to light with the passage of time.
India Inc.’s head honcho’s chime in
“While the near-term global outlook feels shadowed with uncertainty, India’s future is bright” – N Chandrasekaran, Tata Sons Chairman.
In his New Year message to employees of the Tata Group, N Chandrasekaran, Tata Sons Chairman, identified three priorities – namely execution, customer satisfaction, and technology – that the Group must focus on as it moves forward with its transformation journey in the year ahead, going on to emphasise that the next decade will belong to companies who excel in giving customers excellent experiences.
In his message, he said, “India’s future is bright. In 2023, we fared better than most. We showed admirable leadership at a historic G20 summit. Our economy is thriving, with GDP on track to double to USD 7 trillion over the next five years.” He went on to say that India is poised to benefit from “the aforementioned shifts transforming the world. Generative AI, for example, is a potential antidote to our access and inequality problems provided we are careful and introduce the right rules…our Group’s aim should not be merely to adopt, or adapt to, technology. We need to shape it and make it. This New Year, I urge each company to appoint an AI champion to proactively pursue the benefits of AI economically, operationally and socially.”
“Globally, the world needs India to become a reliable challenger to China’s supply-chain dominance. That is the great opportunity of 2024. That is what will fuel the lift-off. Investment is going to flow into India in unprecedented volumes. The opportunity for India’s manufacturing to achieve a quantum leap is within our grasp or ours to lose.” Mahindra Group Chairman, Anand Mahindra
Mahindra Group Chairman, Anand Mahindra, prophesises that the Indian economy will achieve “the mythical lift-off that we have been awaiting, for decades” in 2024, and that “companies that are able to create a portfolio of desirable products both in features and price will face the happy challenge of raising their production to meet demand”.
In his New Year message to his employees, where he underlines that “a New Year is special because it always symbolises a new beginning”, he stated, “No matter how dark the year has gone by, the human spirit has an abiding capacity for hope. 2023 was a year characterised by conflict, climate change and a sluggish post-Covid recovery. The year ended with the world crying out for renewal.”
In Mahindra’s words, 2024 holds immense promise for India’s economy, with the Indian economy poised for lift-off a global necessity. “Globally, the world needs India to become a reliable challenger to China’s supply-chain dominance. That is the great opportunity of 2024. That is what will fuel the lift-off. Investment is going to flow into India in unprecedented volumes. The opportunity for India’s manufacturing to achieve a quantum leap is within our grasp or ours to lose,” he said. In the long run, Mahindra stressed the importance of disruptive innovation to keep India’s economy on an upward trajectory, emphasising the role of innovation as a key driver for sustained economic growth.
“In the Era of Digital Platforms, data has become a new Factor of Production along with Talent and Money. We need to be at the forefront of using data, with AI as an enabler for achieving a quantum jump in productivity and efficiency.” Reliance Industries Chairman Mukesh Ambani
Speaking at the annual Reliance Family Day event, Reliance Industries Chairman Mukesh Ambani also underlined the criticality of AI, and asked all group employees to focus on three important aspects – valuing customers, winning community trust, and enriching competencies and capabilities.
In his address, the Reliance head honcho said, “In the Era of Digital Platforms, data has become a new Factor of Production along with Talent and Money. We need to be at the forefront of using data, with AI as an enabler for achieving a quantum jump in productivity and efficiency.” In saying so, he urged employees to consolidate the group’s place among global leaders in digital data platforms and AI adoption as Reliance reinvents itself to become a unique new-age technology company across all its growth engines. In doing so, his vision is to emerge as a pioneer to develop AI to solve India’s urgent national priorities in education, healthcare, agriculture, and employment generation.
