Parul
More than three-quarters of small businesses in India reported growth in 2023, exceeding pre-pandemic levels. This growth momentum is likely to continue this year as confidence in the local economy and business expansion keeps rising. CPA Australia’s new survey shows that India’s small businesses sector remains one of the most dynamic and fastest-growing in the Asia-Pacific.
The annual Asia-Pacific Small Business Survey was conducted by CPA Australia, one of the largest accounting bodies in the world.
Up from 73 per cent in 2022, 77 per cent of Indian small businesses grew last year, which is the highest level since 2019. 84 per cent anticipate business growth this year, much higher than the market average (70 per cent). Though the outlook for the global economy is uncertain, 80 per cent of Indian respondents are upbeat about the local economy in 2024, above the survey average (65 per cent), and the optimism has been rising since the survey in 2022.
Reflecting the strong business confidence, many surveyed Indian small businesses are keen to hire new staff. 52 per cent increased their headcount in 2023, 67 per cent plan to recruit new staff this year, the highest number of Asia-Pacific surveyed markets.
Prafulla Chhajed, a CPA member of CPA Australia in India, stated: “Micro, Small and Medium-sized Enterprises (MSMEs) are making a significant contribution to India’s economic success. Not only is India’s rapid economic growth and improving business environment boosting their confidence, support from the government ranging from digitalisation to access to funds, is assisting businesses to recover from the pandemic.
“India’s small businesses are enthusiastically improving their performance through innovation, adopting technologies, and building connections with overseas markets.
“‘Good staff’ was nominated as the top positive factor that benefited India small business performance in 2023. It explains why Indian respondents have been so willing to add new employees over the past two years,” Chhajed said.
“This year the pace in jobs creation by small businesses is expected to slow, although remain high in comparison to other markets. This is most likely due to a combination of factors including increasing levels of automation and rising labour costs.”
The survey results show that increasing costs, competition, and cashflow difficulties were the major barriers to India’s small businesses last year. Among various costs, staff costs and materials were the costs that caused the most detriment to small businesses in 2023 and was up slightly from 2022.
