High cost increases offset improved sales, profits remain muted: IIM survey

By A Representative
The Indian Institute of Management-Ahmedabad’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, has found that “the cost perceptions data indicates persistence of high cost pressures.”
Stating that around 70% of the participating firms in the survey perceive significant (over 6%) cost increase for the consecutive two months, the survey says, “Over 39% of the firms in March 2022 round of the survey perceive that costs have increased very significantly (over 10%). For the consecutive two rounds, around 2/5th of the firms reported more than 10% cost increase.”

Based on the responses of around 1,100 companies, the survey further says that for the past three consecutive rounds of the survey “around 52-54% of the firms in the sample are reporting ‘much less than normal’ profit.” It adds, “Improved sales expectations are offset by high cost increases. As a result, profit expectations remain muted.”
On a positive side, the survey says, “Firms’ sales expectations in March 2022 have improved. Percentage of firms reporting ‘much less than normal’ sales has declined to 29% from around 36-37% reported in the last four rounds. About 1/4th of the firms in March 2022 report that sales are ‘about normal’.” "Normal" means as compared to the average level obtained in the preceding 3 years, excluding the Covid-19 period.

The survey further says, “One year ahead business inflation expectations in March 2022, as estimated from the mean of individual probability distribution of unit cost increase, have further increased marginally to 6.12% from 6.09% in February 2022. The business inflation expectations remained above 6% for the second consecutive month.”
“The uncertainty of business inflation expectations in March 2022, as captured by the square root of the average variance of the individual probability distribution of unit cost increase, has remained around 2.1%, same as reported in February 2022”, it adds.

Manufacturing, services: India's low-skill, middle-skill labour remains underemployed

By Francis Kuriakose* The Indian economy was in a state of deceleration well before Covid-19 made its impact in early 2020. This can be inferred from the declining trends of four important macroeconomic variables that indicate the health of the economy in the last quarter of 2019.

Incarceration of Prof Saibaba 'revives' the question: What is crime, who is criminal?

By Kunal Pant* In 2016, a Supreme Court Judge asked the state of Maharashtra, “Do you want to extract a pound of flesh?” The statement was directed against the state for contesting the bail plea of Delhi University Professor GN Saibaba. Saibaba was arrested in 2014, a justification for which was to prevent him from committing what the police called “anti-national activities.”

Modi’s Israel visit strengthened Pakistan’s hand in US–Iran truce: Ex-Indian diplomat

By Jag Jivan M. K. Bhadrakumar , a career diplomat with three decades of service in postings across the former Soviet Union, Pakistan, Iran, Afghanistan, South Korea, Sri Lanka, Germany, and Turkey, has warned that the current truce in the US–Iran war is “fragile and ridden with contradictions.” Writing in his blog India Punchline , Bhadrakumar argues that while Pakistan has emerged as a surprising broker of dialogue, the durability of the ceasefire remains uncertain.

Search This Blog