Skip to main content

IIM-A survey: Inflation, rising costs begin to worry Indian business houses, even as profits start looking up

Perception of inflation
By Our Representative
The Indian Institute of Management-Ahmedabad's (IIM-A's) latest Business Inflation Expectations Survey (BIES), based on responses from 1,941 companies, seeking answers the perceptions on business over the next one year, has said that, while there are signs of improved profit margins in April 2018, "One year ahead business inflation expectation in April 2018 is placed at 4.21%, showing a sharp increase from 3.73% , observed in March 2018."
Pointing out that "the uncertainty of business inflation expectations in April 2018 has increased to 2.24% (from 1.99% in March 2018)", the survey report, released by the top-notch business institute on Monday, underlines, "Businesses in April 2018 expect one year ahead Consumer Price Index (CPI) headline inflation to be 4.67%", which, it believes, is "significantly up from 4.1% observed in February 2018."
At the same reporting thst the business environment appears to be lookin up, the report states, "Responses of 41% of the firms in the sample in April 2018 indicate ‘much less than normal’ profit margin, down from March 2018 level", adding, "Also proportion of firms reporting ‘normal or above normal’ profit has gone up to 35% in April 2018."
Sales levels
Noting that "overall perception of firms shows that there are signs of improved profit margins in April 2018", the report defines "normal" to mean "the average level obtained in the preceding three years."
Coming to sales, the report says, "Around 46% of the firms in the sample reported that sales are ‘normal or greater than normal’ in April 2018", suggesting that "this proportion has increased in April 2018", adding as for cost perceptions, "around 57% of the firms in April 2018 reported that increase in costs" an increase of 3% during the last one year. "The proportion of firms perceiving significant cost increase has gone up sharply to 33% in April 2018", the report adds.
Explaining the suevey, the IIM-A, in a release, said, "The Business Inflation Expectations Survey provides ways to examine the amount of slack in the economy by polling a panel of business leaders about their inflation expectations in the short and medium term." A monthly survey, it "asks questions about year-ahead cost expectations and the factors influencing price changes, such as profit, sales levels, etc."
Cost per unit
Calling the survey "unique", IIM-A says, "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", adding, "One major advantage of BIES is that one can get a probabilistic assessment of inflation expectations and thus can get a measure of uncertainty."
IIM-A further says, the survey "provides an indirect assessment of overall demand condition of the economy", claiming that it's results "useful in understanding the inflation expectations of business and complement other macro data required for policy making."

Comments

TRENDING

Insider plot to kill Deendayal Upadhyay? What RSS pracharak Balraj Madhok said

By Shamsul Islam*  Balraj Madhok's died on May 2, 2016 ending an era of old guards of Hindutva politics. A senior RSS pracharak till his death was paid handsome tributes by the RSS leaders including PM Modi, himself a senior pracharak, for being a "stalwart leader of Jan Sangh. Balraj Madhok ji's ideological commitment was strong and clarity of thought immense. He was selflessly devoted to the nation and society. I had the good fortune of interacting with Balraj Madhok ji on many occasions". The RSS also issued a formal condolence message signed by the Supremo Mohan Bhagwat on behalf of all swayamsevaks, referring to his contribution of commitment to nation and society. He was a leading RSS pracharak on whom his organization relied for initiating prominent Hindutva projects. But today nobody in the RSS-BJP top hierarchy remembers/talks about Madhok as he was an insider chronicler of the immense degeneration which was spreading as an epidemic in the high echelons of th

Central pollution watchdog sees red in Union ministry labelling waste to energy green

By Chythenyen Devika Kulasekaran*  “Destructors”, “incinerators” and “waste-to-energy (WTE) incineration” all mean the same thing – indiscriminate burning of garbage! Having a history of about one and a half centuries, WTE incinerators have seen several reboots over the 19th, 20th and 21st centuries. 

First-of-its-kind? 'Eco-friendly, low cost' sewage treatment system installed in Gujarat

Counterview Desk Following the installation of the Unconventional Decentralized Multi-Stage Reactor (UDMSR) for sewage treatment, a note on what is claimed to be the  first-of-its-kind technology said, the treated sewage from this system “can be directly utilized for agricultural purposes”, even as proving to be a “saviour in the times of water crisis.”

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Indo-Bangla border: Farmers facing 'illegal obstacles' in harvesting, transporting yields

  Counterview Desk  In a representation to the chairperson, National Human Rights Commission, human rights defender Kirity Roy, who is secretary, Banglar Manabadhikar Suraksha Mancha (MASUM), has said that Border Security Force (BSF) personnel are creating "illegal obstacles" for farmers seeking to harvest their ripened yields and transport them to the market in village Jhaukuthi of Cooch Behar district.

'Flawed' argument: Gandhi had minimal role, naval mutinies alone led to Independence

Counterview Desk Reacting to a Counterview  story , "Rewiring history? Bose, not Gandhi, was real Father of Nation: British PM Attlee 'cited'" (January 26, 2016), an avid reader has forwarded  reaction  in the form of a  link , which carries the article "Did Atlee say Gandhi had minimal role in Independence? #FactCheck", published in the site satyagrahis.in. The satyagraha.in article seeks to debunk the view, reported in the Counterview story, taken by retired army officer GD Bakshi in his book, “Bose: An Indian Samurai”, which claims that Gandhiji had a minimal role to play in India's freedom struggle, and that it was Netaji who played the crucial role. We reproduce the satyagraha.in article here. Text: Nowadays it is said by many MK Gandhi critics that Clement Atlee made a statement in which he said Gandhi has ‘minimal’ role in India's independence and gave credit to naval mutinies and with this statement, they concluded the whole freedom struggle.

Wasteland, a colonial legacy, being used to 'give away' vast tracts to Ratnagiri refinery

By Fouziya Tehzeeb* William D’Souza, a 55-year old farmer from Kuthethur, Mangalore, was busy mixing cattle feed when we arrived at his doorsteps. Around 25 km from the bustling city of Mangalore, Kuthethur is a lush green village with thick vegetation. On the way to William’s house the idyllic view gets blocked by the flares and smoke arising from the Mangalore Refinery and Petrochemicals Limited (MRPL).

CAA disregards India's inclusive plural ethos, 'betrays' ideals of freedom struggle: PUCL

Counterview Desk    "Outraged" at the move of the Central government to implement the Citizenship Amendment Act, 2019 (CAA 2019) weeks before the election, the top rights group, People's Union for Civil Liberties (PUCL), has demanded that the law be repealed. 

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Invincible, Modi 'taller' than BJP, RSS: An opportunity for Congress beyond 2024?

By NS Venkataraman*  With the announcement of poll schedule for the 2024 parliamentary election, there is palpable excitement and expectation amongst the countrymen  about the shape of things to happen in India after the  results of the election would be announced. There is also speculation abroad about the future course of developments in India.