A majority of India Inc's chief financial officers remain concerned over regulatory impediments and uncertainty in tax environment, saying they pose risk to the government's 'Make in India' initiative.
More than 70 per cent of over 100 CFOs surveyed by global consultancy Deloitte expect higher revenues as well as earnings in the next one year.
Still, more than half of the respondents do not expect it to be a smooth ride.
"Even if growth has turned around and business confidence is on the rise, regulatory impediments and uncertainty in the tax environment continue to be one of the major concerns shared by the CFOs," the survey said.
As much as 68 per cent of the respondents said high investment risk and lack of clear policy framework are roadblocks to the government's ‘well directed Make In India’ initiative.
As per the survey findings, around 65 per cent of the CFOs are positive about the domestic economic growth in the short-run (over one year period).
The CFOs also expect corporate profitability to show a meaningful uptick over the next one year, as the economy picks up pace, the survey said.
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"Rise in CFO optimism in the short-term is in line with other key developments, such as inflation coming under control, current account deficit contracting to manageable
levels and the likelihood of the government meeting its fiscal target," a Deloitte spokesperson said.
The survey also found that 54 per cent of the CFOs felt that their capital expenditure would be higher during the course of the year, while another 53 per cent see hiring to pick up.
Further, while inflation has moderated enough for the Reserve Bank of India to start the rate cutting cycle, it continues to be a concern shared by a little over 25 per cent of the CFOs, it said.
"The percentage of CFOs who are neutral to the current developments drops from a whopping 33 per cent to 3.1 per cent as we move from the one year period to the two-three year medium-term period," the spokesperson said.
"These findings, therefore, clearly show that the CFOs are willing to give the government more time to bring about the structural change that would give growth a more sustainable and meaningful boost," the spokesperson added.
The Deloitte India CFO survey 2015 is based on responses of over 100 participants spread across diverse sectors.
They represent small scale as well as large scale companies whose revenues vary from less than Rs 250 crore (Rs 2.5 billion) to more than Rs 2,500 crore (Rs 25 billion), respectively.
