Include strikes, political instability, cyber security, corruption: Survey
NEW DELHI (Reuters) — Strikes, political instability, cyber security and corruption have emerged as the biggest risks facing India's booming business sector, but terrorism, natural disasters and crimes against women are also perceived as key threats, a new survey says.
The India Risk Survey 2013, conducted by corporate risk management firm Pinkerton, has found that while India is seen as one of the world's most promising economies, it also faces some of the most dynamic risks.
"Traditionally, important parameters that attract investment into a country have been profitability, cost, infrastructure, freedom of doing business etc. However, of late, the factor of risk has evolved as one of the parameters impacting investment and operations," the survey said.
"The possible consequences can be in the form of loss of time, infrastructure, inventory, manpower and also opportunity to invest in some other economies that are more rewarding."
Based on answers from over 500 respondents in various sectors of Indian business such as manufacturing, technology, hospitality and financial services, the survey found strikes and civil unrest to be the number one risk facing industry.
Close behind were threats from political and governance instability, cyber and information security and corruption, bribery and corporate frauds respectively.
Respondents said natural disasters, terrorism and insurgency, workplace violence and sexual harassment were prominent, but less significant risks.
Corruption and disasters
The survey found that corruption had emerged as the fourth biggest risk in 2013, from not being considered a key threat one year earlier.
The report said India was doing poorly on the global corruption perception index conducted by Transparency International, partly because of a large number of scams and incidents of corruption in both the public and private sectors.
In addition, the Indian financial regulatory authority had reported 2012 as one of the most notorious years for frauds.
"The Reserve Bank of India revealed that losses to Indian banks from financial frauds were the highest in 2012. In 2011-12, the total losses suffered by banks in about 5,569 frauds were to the tune of $820 million," the survey said.
Natural disasters, at number 11 on the list, were also seen as a prominent threat. India is highly prone to earthquakes, floods and cyclones, and last year recorded 22 incidents of floods and 36 of low- and moderate-intensity earthquakes.
The disruption resulting from these types of disaster has crossed sectors, shaking industries and affecting ties with employees, customers and partners, the survey said.
The Federation of Indian Chambers of Commerce and Industry (FICCI), which conducted the survey jointly with Pinkerton, said it would help in better planning to mitigate risks.
"The survey is an attempt to sensitize the government and the corporate world about emerging risks and the danger they pose, so that well-planned strategic policy decisions could be formulated and implemented," said FICCI secretary general A. Didar Singh.