Skip to main content

IIM-A survey 'debunks' GoI claim, says: Sales, profits of Indian firms remain subdued

By Our Representative 

The Indian Institute of Management-Ahmedabad's (IIM-A's) latest round of Business Inflation Expectations Survey (BIES) has found that sales and profit margins of Indian businesses have remained subdued despite tall claims by the Government of India (GoI) that the Indian economy doing well even as world is going in wrong direction.
The survey says that about 56% of the firms are reporting ‘much less than normal’ or ‘somewhat less than normal’ sales in September 2023 – up from 52% reported in August 2023, even as the percentage of firms reporting ‘normal’ and above normal sales has marginally declined to 45% in September 2023 from 47% reported in August 2023.
The IIM-A survey further says that around 36% of the firms in September 2023 are reporting profit margins to be ‘about normal’ or greater, as compared to 39% reported in August 2023, even as pointing ou that, "Overall, the profit margins expectations have remained somewhat subdued" for businesses.
At the same time, the survey says that the cost perceptions data in September 2023 does not indicate any significant increase in cost pressures. The percentage of firms perceiving significant cost increase (over 6%) has remained unchanged around 33% during last four rounds.
The survey seeks to examine the amount of slack in the economy by polling a panel of business leaders, asking them questions about year-ahead cost expectations and the factors influencing price changes, such as profit, sales levels, etc. It is considered 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.
Providing an indirect assessment of overall demand condition of the economy, results of the Survey are claimed to be useful in understanding the inflation expectations of businesses and complement other macro data required for policy making. Carried out by the Misra Centre for Financial Markets and Economy, IIM-A, results of the survey are based on the responses of around 1,100 companies.
According to the survey, "One year ahead business inflation expectation, as estimated from the mean of individual probability distribution of unit cost increase, has marginally increased to 4.39% in September 2023, from 4.32% reported in August 2023. Average inflation expectation of the firms remained anchored around 4.3% for the past five consecutive months."

Comments

Amarjyoti said…
I am not an expert. But have a question after reading this blog. If business is operating in less than normal profit or turnover is below normal than the survey sample may not be statistically correct as monthly GST collection is rising from ₹1.59 lakh crore to more than ₹1.62 lakh crore in Aug to Sept 23.
C Satyanarayana said…
GST is rising because fewcompanies are earning profits at the cost of others. It is like this:700 orfinary passengers travel they pay ony 100.total collection 70000. But if 500 travel in AC they each 300 total 150000.Nirmala using this technique.
Anonymous said…
The IIM-A study is quite contrary to the analysis. May be the sample surveyed must be skewed. May be even a Narrative building exercise. (Academics are full of leftist ideologues). The increasing GST collections is contrary to these claims.
Anonymous said…
GST is a function of Sales turnover and not of Profit.
Anonymous said…
Besides, who tells the real picture anyways? This is a publicity article by phony academics.
Sudip said…
Perception surveys are mostly misleading and naturally biased. Look for factual data like GST collection, income tax return etc
Anonymous said…
GST collection is a function of manufaty and services output. These figures are not being correlated. Also.GST collection has to read along with no of raids conducted showing ITC claims without actual sales.

TRENDING

'Very low rung in quality ladder': Critique of ICMR study on 'sudden deaths' post-2021

By Bhaskaran Raman*  Since about mid-2021, a new phenomenon of extreme concern has been observed throughout the world, including India : unexplained sudden deaths of seemingly healthy and active people, especially youngsters. In the recently concluded Navratri garba celebrations, an unprecedented number of young persons succumbed to heart attack deaths. After a long delay, ICMR (Indian Council for Medical Research) has finally has published a case-control study on sudden deaths among Indians of age 18-45.

SC 'appears to foster' culture of secrecy, does not seek electoral bond details from SBI

By Rosamma Thomas*  In its order of November 2, 2023 on the case of Association for Democratic Reforms vs Union of India contesting constitutional validity of electoral bonds, the Supreme Court directed all political parties to give particulars of the bonds received by them in sealed covers to the Election Commission of India. SC sought that information be updated until September 2023. 

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. 

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.

Only 12% of schools RTE compliant: Whither 6% budgetary allocation for education?

By Ambarish Rai* Despite Indian state’s commitment of 6% GDP on education, the Finance Minister completely ignored right to education for children and strengthening implementation of RTE Act which makes education a fundamental right in her budget speech . The Right to Education (RTE) Forum, which is a collective of different stakeholders in education, condemns this neglect of a legal entitlement, which is unconstitutional and demand for overall increase in the budget to ensure improvement in learning outcomes and overall enhancement of quality education.

Savarkar in Ahmedabad 'declared' two-nation theory in 1937, Jinnah followed 3 years later

By Our Representative One of the top freedom fighters whom BJP and Prime Minister Narendra Modi revere the most, Vinayak Damodar Savarkar, was also a great supporter of the two nation theory for India, one for Hindus another for Muslims, claims a new expose on the man who is also known to be the original proponent of the concept of Hindutva.

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".

'Ambiguous policy': India late in advocating EVs as energy storage in national grid

By Shankar Sharma*  This is regarding the points raised by the Chief Electricity Authority’s (CEA's) advocacy for usage of electrical vehicles (EVs) as energy storage technology, and few associated issues . An objective reading of what he states should reiterate the enormously growing importance of battery energy storage systems (BESS) in our need to transition to a net-zero carbon scenario for the country.

Union Health Ministry, FSSAI 'fail to respond' to NHRC directive on packaged food

By Our Representative  The National Human Rights Commission (NHRC) has expressed deep concern over the adverse health effects caused by packaged foods high in salt, sugar, and saturated fats. Recognizing it as a violation of the Right to Life and Right to Health of Indian citizens, the quasi-judicial body called for a response from the Food Safety and Standards Authority of India (FSSAI) regarding its selection of front-of-pack labels aimed at providing consumers with information to make healthier choices.

How national chauvinism 'overtook' sport despite cricketing glory of World Cup 2023

By Harsh Thakor*  The recently-concluded cricket World Cup was a testimony or manifestation of the thrills, intensity, twists and turns in sport and evolution of the game of cricket. It carried on the trend of the World Cups of yesteryears. Possibly, this was the best ever Indian team in a World Cup, and arguably amongst the best ever to contest a World Cup.