India's senior finance executives are optimistic about the country's overall economy for the next three months on the back of continued reform initiatives taken by the government, a survey says.
According to research firm Dun and Bradstreet's India [ Images ] CFO survey, the confidence level of Indian CFOs in the overall financial and macro-economic conditions for first quarter of the calendar year 2013 (January-March) stood at 59.4. This was almost unchanged from the level (59.6) witnessed during the previous three months.
Optimism level ranges from 0 to 100 - 0 being most pessimistic and 100 being most optimistic.
"The CFO survey conducted by D&B India reveals that the optimism level among the CFOs stands almost unchanged thereby indicating consolidation in economic activity. While, optimism levels look positive at the company level, the optimism on the overall macroeconomic condition is gradually building up," D&B India chief operating officer Mohan Ramaswamy said.
"The developments in the domestic economy which include continuation of the reformist measures and expected easing of the inflationary pressures have aided in stabilising risk perception among the CFOs," he added.
The government has recently taken a number of reform initiatives like opening FDI to multi-brand to retail sector, aviation and broadcasting sector, hiking diesel prices, capping the number of subsidised LPG cylinders.
The government has unleashed a second wave of reforms deciding to open the pension sector to foreign investment and raising the FDI cap in insurance to 49 per cent.
Moreover, around 57 per cent of the surveyed CFO's consider risk appetite would not change in January-March in 2012 compared to corresponding period last year.
Besides, about 47 per cent of the CFOs expect the level of financial risks both on the company's balance sheet and for the corporate sector as a whole to remain the same during quarter.
Nearly 40 per cent of CFOs have also revealed tightening of credit appraisal mechanisms to be an important risk mitigating measure over the next two quarters, D&B said.
"The CFOs perceive the level of financial risks on company's balance sheet as well as for corporate sector as a whole to remain unchanged during the forthcoming quarter as compared to the same quarter in the previous year. Further, increased number of CFOs indicated organic expansion to be their priority in next two quarters," Ramaswamy said.
More than 50 per cent of the surveyed CFOs have stated that their need for raising short-term and long-term funds will not change during January-March.
Further, a majority of CFOs expect the cost of raising funds from the market to remain unchanged and availability of funds to increase during the quarter.