The India Risk Survey 2015 (IRS 2015), the annual flagship initiative of FICCI & Pinkerton, attempts to showcase the views and perceptions of key business leaders, public figures, as well as professionals across various sectors and geographies regarding operational, safety and strategic risks. The survey spreads across the entire industry spectrum covering different geographical zones of the country. The survey results aims to provide the industry and government decision-makers with a very important tool to holistically analyse the impact of various risks, so as to plan and execute strategies to prevent, mitigate or control the impact of these risks to business establishments.
The results of the India Risk Survey 2015 aptly reflect the changes in risk spectrum that India has witnessed within the last year. While there is an overall sense of comfort owing to the recent political stability achieved at the Centre, the equally ardent need to deploy resources for handling corruption, information security and crime is evident as well. The recent set of economic projections depicting robust growth numbers for India have the potential for further improvement, with parallel positive steps being taken to better the business environment and aid the overall scenario. The report reiterates the need to have stability and continuity of policy regime and compliance to attract better investment in India.
As evident, the survey encompasses 12 key risks that pose a threat to the entire economic system of the country; and though each risk is rated on a mutually exclusive basis for the purpose of the survey, a deeper reading would reveal their interconnectedness across domains.
Continuing with the trend evident from last year, the focus of the respondents for risk analysis continues to be on how the entire gamut of corruption, scams and corporate frauds affect the economy. In 2015, ‘Corruption, Bribery and Corporate Frauds’ continue to be ranked as the topmost risk. The recent news coverage and public uproar related to various cases involving major corporate houses justifies this trend as having the highest mind recall value and has also been assigned the greatest concern in recent times.
If one were to conduct a root-cause analysis of the major corporate frauds of recent times, a common cause that would emerge is pilferage of data/sensitive information. Information security is a growing concern, keeping in mind the technological advancements and the tendency of corporate houses to create more and more intellectual property and competitive strategies. Any compromise with the same is interlinked with providing an opportunity for frauds and for the corporate to stand a risk of incurring unimaginable losses. The realization of every industry waking up to this as a looming threat is best defined through the ranking of ‘Information and Cyber Insecurity’ this year, which climbed up 3 positions from 2014 to be ranked at No. 2. The entire gamut of risks faced by corporate houses has enabled a typical perception from respondents across the globe; they are concerned with both the gravest external threat and the most perceived internal threat.
Over the last few years in India, the rising threat of terror incidents in major cities has caused considerable alarm; the devastation from these incidents may have easily disrupted the entire business continuity structure of the land. This concern can also be said to be the fastest growing one amongst the Indian professionals and can be seen by the rise in ranking of the risk of ‘Terrorism and Insurgency’ from 10th position in 2014 to 3rd in 2015.
For any economy that faces the aforementioned risks, the external threat or risk of ‘Crime’ cannot be ignored and the respondents to this survey have ranked the same at No. 5 in 2015. This is also supplemented by the growing instances of crime against women in India, which has not only come in for severe criticism within the country but has also been a topic of discussion in all international forums, affecting the image of India as a suitable business destination.
The above illustration, analysing the trend of risks for the past three years, indicates that the top five risks that impact Indian business environment include ‘Corruption, Bribery and Corporate Frauds’; ‘Information and Cyber Insecurity’; ‘Terrorism and Insurgency’; ‘Business Espionage’; and, ‘Crime’. The risks of ‘Strikes, Closures and Unrest’ and ‘Political and Governance Instability’, which were earlier in the top five risk brackets have dropped in the rankings from No. 2 and No. 3 positions to No. 6 and No. 11, respectively. This is a major shift in the yearly trends primarily due to the positive impact caused by a perceived stable Government coming to power at the Centre post the 2014 general elections.
With a new Government at the helm, there is a lot of optimism among domestic and global investors. The “Make in India” and “Skilling India” initiative of the new Government, to revive manufacturing in the country and be globally competitive, is believed to have kick-started the recovery of the Indian economy. A proactive risk management strategy would help business to de-risk and cope up with the existing and evolving risks. Our present economic growth thus demands a prudent and nurturing risk culture at an enterprise level, supported by optimal utilization of resources in a cost-effective and efficient manner. The IRS is a joint effort by FICCI and Pinkerton to help business leadership in devising such a risk mitigation strategy to create a stable and secure business environment.
The Economic Times | March 2015
Corruption, bribery and corporate frauds has been ranked as the topmost risk to the entire economic system of the country, according to a survey conducted by the industry chamber FICCI. Read here »
Yahoo India Finance | March 2015
A leading industry body on Friday ranked ‘corruption, bribery and corporate frauds’ as the topmost risk that impact Indian business environment. Read here »
Business Standard | March 2015
Corruption, bribery and corporate frauds has been ranked as the topmost risk to the entire economic system of the country, according to a survey conducted by the industry chamber FICCI. The survey, FICCI-Pinkerton India Risk Survey 2015, encompasses 12 key risks that pose a threat to the entire economic system of the country. Read here »