Just 57 per cent of investors interviewed in a poll are willing to take greater risk in India in 2018 against 59 per cent in the previous year, according to a survey.
The survey, carried out by Deloitte, attributed this "marginal" decline to uncertainties around the challenges the economy might face because of economic headwinds and political uncertainties arising owing to the impending elections in 2019.
That said, India is likely to remain one of the fastest-growing economies in the world, said respondents to the survey.
While 66 per cent of the respondents are positive about economic prospects in the near term, the percentage jumps to 94 per cent when it comes to prospects over the next two-three years.
The survey is based on responses of more than 250 chief financial officers (CFOs), with revenues of their companies spanning from less than Rs 5 billion to more than Rs 100 billion.
The respondents include listed and unlisted companies in both the private and public sectors, and multinationals headquartered in India as well as overseas.
In terms of the external environment, the survey said that regulatory and policy changes such as IndAS (Indian Accounting Standards), demonetisation, or the goods and services tax (GST) were the biggest concerns for CFOs. Given this, CFOs said it had also raised uncertainties in the business environment, and this seemed to be a challenge for 60 per cent of the CFOs surveyed.
Technology disruption is another concern. In a volatile economic situation, where the pace of technological advances is continuously accelerating, CFOs will need to start adapting to these changes and implementing them in order to optimise their growth through technology, said Deloitte.
Companies have seen numerous technological disruptions and will continue to encounter them in coming years.
While 79 per cent saw regulatory and policy changes as concerns, 60 per cent said change in the business environment was the worry and 49 per cent found technology disruption as the challenge.
When asked about the key regulatory changes faced by the company, the answer was very clear with 89 per cent of the CFOs highlighting the GST as the top challenge. As many as 77 per cent of CFOs said the GST had affected the overall business and more than 70 per cent said it had affected the revenue and supply chains specifically.