Skip to main content

India's business leaders find 'clear signs' of cost pressures building up: IIM-A survey

How do current costs per unit compare with this time last year? – % responses
By Our Representative
The latest Indian Institute of Management-Ahmedabad’s (IIM-A’s) Business Inflation Expectations Survey (BIES), which seeks to examine the amount of slack in the economy in the short and medium term by polling a panel of business leaders, has found that, following the Covid-19 crisis, the perceptions data suggest “clear signs of cost pressures building up.”
“Over 57% of the firms believe that the current cost increase is 3.1% and above as compared to the same time last year”, the survey results, made available by IIM-A, says, noting, “Over two-fifths of the firms perceive that the current cost increase is over 6%.” An IIM-A note on the survey adds, “It is pertinent to note that now over one-firth of the firms perceive that current cost increase is over 10%.
The report says, the effect of the extension of lockdown against the backdrop of Covid-19 spread is seen in the results of the survey. The economy has come to a standstill, and inflation expectations are rising fast, regretting, “The Covid-19 pandemic and subsequent lockdown of the economy have had an impact on the BIES survey responses for April 2020.”
The result was, “In the first fortnight of May 2020, there were very few responses received. Due to obvious reasons, many firms declined to provide data on sales and profit expectations. Finally, the questionnaire was shortened and the data on only inflation/cost were sought.”
Accordingly, survey results for inflation expectations and cost perceptions alone have been declared, says the IIM-A note, adding, the number of respondents in the latest BIES round has “gone below 1,000” as against around 2,000 respondents during previous surveys.
 One year ahead business inflation expectations (%)
Carried out under Prof Abhiman Das, introduced BIES as a monthly exercise at IIM-A May 2017, questions are asked about year-ahead cost expectations and the factors influencing price changes, such as profit, sales levels, etc. The survey is claimed to be 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.”
The results of the survey suggest that one year ahead business inflation expectations in April 2020, “as estimated from the mean of individual probability distribution of unit cost increase, have declined by 20 basis points to 4.37% from 4.57% reported in March 2020.” However, the IIM-A note says, “It has still remained over 4% for two consecutive months.”
At the same time, the note says, “Uncertainty of business inflation expectations, as captured by the square root of the average variance of the individual probability distribution of unit cost increase, has marginally declined to 2.0% in April 2020 from around 2.1% in March 2020.”

Comments

TRENDING

Astonishingly sycophantic: Ex-Gujarat topcop on 2002 Godhra riots probe panel report

By Rajiv Shah  In a scathing critique of the 2002 communal riots inquiry commission report, released by the Gujarat government in December 2019 five years after it was submitted, the State’s former topcop RB Sreekumar has said that it “unequivocally” and “meticulously” takes care “to refrain from probing and taking cognizance of any deviant action of omission and commission by the State administration, particularly those operating in the criminal justice system, who facilitated extensive mass violence and enabled brigands to perpetrate anti-minority crimes.”

Two of 12 top caste-based sexual violence cases from 'model' Gujarat: NGO report

By Rajiv Shah   The National Council of Women Leaders (NCWL), a civil rights group, has compiled what it has called “landmark cases of caste-based sexual violence” between 1985 and 2020 to mark the first anniversary of the notorious Hathras gangrape case, which led to the death of a young Dalit woman in September 2020.

Riddled with Brahmanical mindset, India's health care 'serving' corporate interests

By Vidya Bhushan Rawat*  In this second part of my conversation (click here for first part), Dr Manisha Bangar speaks about the health crisis in India how the government is trying to privatise things, and where our response during the Corona period was lacking. She also gives us an understanding of people opposing nutritious meals for children in the mid-day meal.

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.

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".

Inaccurate gender-relevant data 'spoiling' government policy on Covid social impact

By Simi Mehta*  The impact of the Covid-19 pandemic has been different across vulnerable groups. They were hit by the pandemic at various stages, whether it was accessibility to medical treatment or financial support. The second wave witnessed human suffering at a level where one can never forget the traumatized faces of people due to the inaccessibility and unavailability of essential medical services such as hospitals beds and oxygen. The probability of the third wave has also been one of the major upcoming challenges.

Anti-Dalit atrocities increase 9.4% despite pandemic, Uttar Pradesh tops the list: Report

By Rahul Singh* Data on crime against Dalits and Adivasis in the Crime In India Report, 2020 draws a distinct pattern of similarity between rural and urban spaces. Published by the National Crime Records Bureau (NCRB), they capture some anomalies and interesting trends. The report also shows that a large proportion of crimes against Dalits and Adivasis involves crime against women.

Vindictive raids? Centre 'retaliates' after Delhi govt child rights body's clean chit to ex-babu

By Our Representative  Over 700 academics, advocates, activists, civil servants, writers, film makers, journalists, musicians and artists have condemned the raids by the Enforcement Directorate (ED) on the offices and private home of top IAS bureaucrat-turned-human rights and peace activist Harsh Mander, stating, the aim is nothing but to “harass and intimidate” him.

Flamboyant 'demagogues' adjust politics, personality in shadow of democracy

Modi, Erdogan, Bolsonaro By Ajit Singh The terms dictators and demagogues are used interchangeably in various contexts, but there is a difference. The former rule over a totalitarian states where governments are able to exercise complete influence over every aspect of citizens’ life, whereas the latter are a "wannabe dictators" but due to the system of checks and balances they are are not fully capable to create police states.

Power supply lines in Thar 'pushing' Great Indian Bustard to extinction: Researchers

By Rosamma Thomas*  Electricity supply lines pose a huge risk to birds and affect biodiversity, but there is little research about the numbers of birds dying of such collision in the tropical nations. In August 2021, academic journal Biological Conservation carried the results of a survey conducted in 2017-18 on 4,200 sq km of the Thar Desert in Jaisalmer district of Rajasthan. This was the first comprehensive survey of this nature in the region.