Skip to main content

India's 65% firms report squeezing of profits, 50% plus say sales were less than normal: IIM-Ahmedabad survey

By Our Representative
An Indian Institute of Management-Ahmedabad (IIM-A) survey, based on responses from 1941 companies, has revealed that, while inflation and costs may not be issues with them, but squeezing profits and sales is surely bothering them. Called Business Inflation Expectations Survey (BIES), March 2018, it seeks to quantify “slack” that may have set into the India economy.
Providing a short and medium term perspective, the survey, carried out each month, asks questions about year-ahead cost expectations and the factors influencing price changes, such as profit, sales levels, etc.
IIM-A claims, “The survey is unique in that it goes straight to businesses, the price setters, rather than to consumers or households, to understand their expectations of the price level changes.”
As many as 44% of the firms in the IIM-A’s BIES’ 11th round survey indicate “much less than normal” profit margin, while over 65% of firms continue to report “squeezing of profit margins”, the survey report says, adding, “This proportion has remained more or less stable during last four months.”
Profit margins - % response
Pointing out that the “perception of higher profit margins in the current economic conditions is not supported by the data”, the report states, 28% of the firms in the sample reported that sales were “much less than normal”, and this proportion has been quite stable during last four consecutive months.
At the same time, the report says, over half of the firms in the sample continued to report that sales levels were “much or somewhat less than normal”, adding, “Overall data shows persistence of the pessimism about subdued sales conditions.”
Sales levels - % response
The IIM-A believes, “One major advantage of BIES is that one can get a probabilistic assessment of inflation expectations and thus can get a measure of uncertainty. It also provides an indirect assessment of overall demand condition of the economy.”
It adds, “Results of this survey are, therefore, useful in understanding the inflation expectations of business and complement other macro data required for policy making… The questionnaire of BIES is finalized based on the detailed feedback received from the industry, academicians and policy makers.”
Costs per unit compare with this time last year? – % responses
Companies, mostly in the manufacturing sector, were selected based on certain sampling criteria from the list of companies as available with the Ministry of Corporate Affairs (MCA).
As for inflation expectations, the report states, “One year ahead business inflation expectation in March 2018, as estimated from the mean probability distribution of unit cost increase, is placed at 3.73%, showing a decline from 3.85% observed in February 2018.”
One year ahead business inflation expectations (%)
It adds, “Uncertainty of business inflation expectations in February 2018, as captured by the square root of the average variance of the individual mean probability distributions, is estimated to be 1.99% (remained almost same as observed in February 2018).”
As regards cost perceptions, the report states, the data in does not indicate “significant increase” in costs, with “around 55% of the firms in reporting that “increase in costs has been more than 3% during the last one year. It adds, “This proportion has almost remained unchanged as compared to February 2018 data.”

Comments

TRENDING

'These people shouldn't be in jail': UN official seeks release of 16 human rights defenders

By Our Representative A United Nations human rights official has called upon the Government of India (GoI) to “immediately release" 16 human rights defenders who have been imprisoned on charges of terrorism in the Bhima-Koregaon Case, insisting, “These people should not be in jail. They are our modern-day heroes and we should all be looking to them and supporting them and demanding their release.”  

Arrest of Fr Stan Swamy: UN makes public letter seeking explanation from Govt of India

Counterview Desk In a letter to the Government of India (GoI), three senior United Nations (UN) officials – Elina Steinerte, vice-chair of the Working Group on Arbitrary Detention; Mary Lawlor, special rapporteur on the situation of human rights defenders; and Fernand de Varennes, special rapporteur on minority issues – have said that the arrest of veteran activist Father Stan Swamy in October 2020 marks “the escalation of harassment the human rights defender has been subjected to since 2018.”

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Farm laws 'precursor' to free trade deal envisaged by US corporates to allow GMO

By Rajiv Shah Did the Government of India come up with the three farm laws, first rushed by promulgating ordinances in June 2020, to not just open the country’s agricultural sector to the corporate sector but also as a precursor to comply with the requirements of the United States for a Free Trade Agreement (FTA), as envisaged by the outgoing US president Donald Trump?

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam* RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

Differing from Ambedkar, Kancha Ilaiah holds a 'different' theory of caste system

By Banavath Aravind* I was introduced to Kancha Ilaiah’s work when I was about 20 years old. He was then in the midst of a controversy for a chapter in his book "Post-Hindu India: A Discourse in Dalit-Bahujan, Socio-Spiritual and Scientific Revolution", which termed the Baniya community as social smugglers. During many of his debates, I had come to notice his undeterred fighting spirit in trying to bring up certain fundamental social issues that were hitherto undiscussed. I eventually came across some of his works and started reading them silently. I’m deliberately stressing upon the word ‘silently’ here, as this was the kind of silence particularly associated with sensitive social issues like caste, religion, etc. But, as I write this essay, I feel silences on sensitive issues should be broken. Ilaiah opened up an entirely new debate that had the vigour and strength to counter the systemic Brahmanism. His methods of research were also novel in terms of going back to the roo

Fr Stan's arrest figures in UK Parliament: Govt says, Indian authorities were 'alerted'

London protest for release of Stan Swamy  By Rajiv Shah Will Father Stan Swamy’s arrest, especially the fact that he is a Christian and a priest, turn out to be major international embarrassment for the Government of India? It may well happen, if a recent debate on a resolution titled “India: Persecution of Minority Groups” in the United Kingdom (UK) Parliament is any indication. While Jesuits have protested Fr Stan's arrest in UK and US, the resolution, adopted in the Parliament, said, “This House has considered the matter of persecution of Muslims, Christians and minority groups in India”.

New trend? Riots 'expanded' to new rural areas post-2002 Gujarat carnage: Report

A VHP poster declaring a Gujarat village part of Hindu Rashtra  By Rajiv Shah  Buniyaad, a Gujarat-based civil society organization, engaged in monitoring of communal violence in the state, in a new report, “Peaceful Gujarat: An Illusion or Truth?” has said that a “new trend” has come about in communal violence in the state, where the parts of Gujarat which didn't see communal riots in 2002 are experiencing “regular bouts” of communal violence.

More than 5,200 Gujarat schools to be closed down, merged, says govt document

RTE Forum, Gujarat, releasing fact-sheet on education By Our Representative A Gujarat government document has revealed that it is planning to close down 5,223 schools in the name of school merger. The document, dated July 20, 201 was released by the Right to Education (RTE) Forum, Gujarat. It shows that the worst-affected districts because of this merger are those which are populated by marginalized communities – especially tribals, Dalits and minorities, said RTE Forum’s Gujarat convener Mujahid Nafees.

Consumption pattern, not economic shock behind 'poor' child health indicators

By Neeraj Kumar, Arup Mitra* The findings of the latest round of National Family Health Survey (NFHS-5) conducted in 2019-20 covering 22 States/UTs under Phase-I  present a somewhat disappointing picture of children’s health in India. Majority of the experts, based on prima facie evidence, just highlighted the deteriorating sign of child health in terms of increase in proportion of stunted and underweight children in most of the phase-I states/UTs over last two rounds of NFHS (2015-16 to 2019-20).