High cost increase, muted sales 'severely affecting' industry profits: IIM-A survey

By A Representative
The Indian Institute of Management-Ahmedabad's (IIM-A's) Business Inflation Expectations Survey (BIES), which seeks to provide 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, has said that high cost increase along with muted sales has severely affected industry profit margins in India.
Pointing towards hardening of cost pressures and subdued sales expectations, the BIES report says, around 70% of the firms perceived significant (over 6%) cost increase, as against 62% reported a month earlier.

“Over 39% of the firms perceive that costs have increased very significantly (over 10%), as compared to 36% reported in the earlier round. For the first time, around 2/5th of the firms reported more than 10% cost increase”, the survey report states.
Pointing out that firms’ sales expectations, the report, based on a survey of about a thousand top business executives, says, the firms reporting ‘much less than normal’ sales was at 36-37%, adding, over 59% of the reported that sales were ‘much or somewhat less than normal.”
As for profits, says the survey report, claiming 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”, over 52% of the firms in the sample reported ‘much less than normal’ profit – “only marginally down from 54% reported earlier”.

The report further says, one year ahead business inflation expectations, as estimated from the mean of individual probability distribution of unit cost increase, have further increased by 15 basis points to 6.09% from 5.94% reported a month earlier.
Noting that respondents were also asked to project one year ahead CPI headline inflation through an additional question using a probability distribution, the report adds, “The businesses expect one year ahead CPI headline inflation to be 5.74%, sharply up from 4.96% reported in December 2021.”

Neville Cardus: The man who turned cricket writing into poetry

By Harsh Thakor* Neville Cardus was one of the most remarkable literary figures of the twentieth century. A prolific English writer and critic, he achieved distinction in two vastly different fields: cricket and classical music. Entirely self-taught, Cardus rose from humble beginnings to become both the cricket correspondent and chief music critic of The Manchester Guardian . His achievements in these contrasting disciplines earned him widespread acclaim and established him as one of the foremost critics of his generation. In February 2025, the cricketing and literary world marked the fiftieth anniversary of his death, which occurred in February 1975.

Ideological shifts and structural realities within India's left-wing insurgency

By Harsh Thakor* The Maoist insurgency in India is arguably at its weakest point since the formation of the Communist Party of India (Maoist) in 2004. Years of sustained counterinsurgency operations, leadership losses, shrinking territorial influence, declining recruitment, and growing technological advantages enjoyed by the state have significantly eroded the movement's operational capabilities.

The Dalit body on screen: Stereotypes, sacrifice, and subjugation in Hindi films

By Dr. Prem Singh* Despite centuries of reformist efforts, from Gandhi and Ambedkar to contemporary activists, the caste system remains deeply embedded in the Indian psyche. One of the primary reasons for this persistence is the religious sanction provided by Brahminical scriptures, which have shaped not only social structures but also cultural and artistic expressions.

Counterview

Search This Blog