The thing you learn from India is that anything is possible, says Ed Nusbaum

Ed Nusbaum, Global CEO of professional services company Grant Thornton, was in India recently. He spoke with BT's Goutam Das on the company's growing business in and learnings from India. Excerpts:

Q. What brings you to India?

A. I come to India to visit clients, to visit our people. We have over 2,000 people in India. It is a very important country for our global organisation. We released a survey of business confidence which showed that India is top of the list in terms of optimism.

Q. Has the country turned optimistic because of the new government?

A. There are a variety of reasons, but the new government has made a difference. Prime Minister [Narendra] Modi is certainly saying the right things, his initial actions are very supportive of business, and he is generating popular support. He has the right combination of both being pro-business and being popular among the population, which would enable him to get things done. All the business leaders I have talked to in India and as I travel round the world, indicate that there is a positive trend.

Q. Is the positive trend going to translate into business?

A. When we do a business optimism survey, we also ask what do you predict for your revenue growth for the next 12 months and what do you predict for profitability. Ninety-five per cent said they predict higher revenue over the next 12 months, highest in the world. Around 85 per cent said they predict higher profitability. In another positive side, over 70 per cent said they would hire more people. We see increased confidence in the business environment and that triggers more investment - both foreign investment and investment within India. People, when hired, will have more money to spend. That becomes a cycle in the right direction.

Q. How would you rate India's chances of bagging some of the manufacturing jobs that are moving out of China?

A. I think it is possible. Certainly, China will continue to have a strong economy. But parts of China are becoming more expensive. We have seen signs of the automotive parts industry increasing in India. That's an opportunity for specific manufacturing that creates jobs. As you look at FDI in manufacturing, labour wages are one factor. The other factors are the infrastructure, skilled workforce, and ease of doing business. Going back to our survey, one of the things stated as an issue in India is too much regulation, red tape, bureaucracy. That reduces the ease of doing business. The signs are that is getting addressed. If it does, you will see more foreign companies coming into India.

Q. Is it a good time for your company to do business in India? Globally, consulting does well when economies are depressed, which means you will do just fine in Europe but not in India.

A. We do accounting, auditing, tax and consulting advisory services. It is true we have experts who restructure businesses in a down economy. But for us, a good economy is a good thing. So the positive situation in India is positive for us. Grant Thornton is 40,000 people worldwide. We have 2,000 in India. India is one of the fastest-growing countries for us. We see tremendous opportunity for the accounting profession.

As companies grow, there is a lot of focus on improving corporate governance - improved internal control, auditor rotation, increased oversight of the accounting profession. That creates opportunities for us. In addition, India has moved towards International Financial Reporting Standards (IFRS). It makes it easier for FDI [foreign direct investment] to come in because India would be using the same accounting standards as the rest of the world. As people look to evaluate their investment, they would get better information. In order to get that information, they need support from accounting firms. We see the opportunity to grow very rapidly in India. Lot of our focus is on Indian companies who want to become global or are already global.

Q. Of late your company has seen a spate of lawsuits globally (a property tycoon in the UK launched a »2.2-billion lawsuit against the firm and others, for instance). What's the learning here for you as CEO?

A. Unfortunately in the accounting profession, all accounting firms get sued for different matters. It is a very unfortunate part of our business. It is not the same in each country. Of course, the United States is the most litigious. As you look at corporate governance and changing laws in India, I would encourage you not to adopt the US litigation environment. It makes it very difficult for companies to do business. We learn from every situation. We are constantly trying to improve our quality, our inspections. Whether it is a lawsuit or an inspection process, we study those cases, we learn from them, and we try to adjust our policies and procedures to improve the quality as an ongoing process.

Q. In your operations in India thus far, what has been your personal learning?

A. The thing you learn from India is that anything is possible. The rapid pace of change, the utilisation of extremely smart people combined with technology can dramatically change processes. You can get some of the best ideas from the youngest people - that is something I have learnt coming to India.