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 A 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

Defeat of martial law: Has the decisive moment for change come in South Korea?

By Steven Lee  Late at night on December 3, soldiers stormed into South Korea’s National Assembly in armored vehicles and combat helicopters. Assembly staff desperately blocked their assault with fire extinguishers and barricades. South Korea’s President Yoon Suk Yeol had just declared martial law to “ eliminate ‘anti-state’ forces .”

70,000 migrants, sold on Canadian dream, face uncertain future: Canada reinvents the xenophobic wheel

By Saurav Sarkar*  Bikram Singh is running out of time on his post-study work visa in Canada. Singh is one of about 70,000 migrants who were sold on the Canadian dream of eventually making the country their home but now face an uncertain future with their work permits set to expire by December 2024. They came from places like India, China, and the Philippines, and sold their land and belongings in their home countries, took out loans, or made other enormous commitments to get themselves to Canada.

EVMs: Govt must prove beyond reasonable doubt it's upholding mandate for free, fair polls

By Jerald D’souza  With the growth of India’s population, concerns about electoral fraud associated with ballot papers, also began to escalate. In 1989, the People’s Representation Act was amended to enable EVMs to prevent electoral fraud. In 1998, EVMs made their debut during legislative assembly elections and for the first time for general elections in 2004. However, criticisms against the EVMs and questions about their integrity have been raised by political parties, civil society and the general population. On 2 February 2024, there was a noteworthy demonstration of dissent where numerous individuals, including Ambedkarite advocates, legal professionals, and other members of civil society  convened at Delhi’s Jantar Mantar demanding the prohibition of EVMs. In 2024, the Supreme court had slapped down a petition to return to paper ballots on the basis that machines give “absolutely accurate results” unless human bias maligns them. The court stated that it was open to testi...

This Indian British Marxist blamed USSR's collapse in 1991 on Khrushchev's 'revisionism'

By Harsh Thakor*  Harpal Singh Brar, British Indian Marxist scholar and communist leader, has passed away in Chandigarh. He was 85. He was a lifelong supporter of socialism, Marxism, and the working class. He will be remembered among British Communists.

Chalapathi's death in encounter suggests Maoists' inability to establish broader mass support

By Harsh Thakor* The Maoist movement experienced a significant loss during the Ramagudem encounter on January 21, with the death of Chalapathi (Pratap), a Central Committee member of the CPI (Maoist). His death, along with 15 others, marks a major setback for the movement. Reports suggest that his location was revealed to security forces through a selfie with his wife.

A groundbreaking non-violent approach: Maharishi’s invincible defense technology

By MajGen (R) Kulwant Singh, Col (R) SP Bakshi, Col (R) Jitendra Jung Karki, LtCol (R) Gunter Chassé & Dr David Leffler*  In today’s turbulent world, achieving lasting peace and ensuring national security are more urgent than ever. Traditional defense methods focus on advanced weapons, military strategies, and tactics, but a groundbreaking approach offers a new non-violent and holistic solution: Maharishi’s Invincible Defense Technology (IDT). 

Operation Kagar represents Indian state's intensified attempt to extinguish Maoism: Resistance continues

By Harsh Thakor Operation Kagar represents the Indian state's intensified attempt to extinguish Maoism, which claims to embody the struggles and aspirations of Adivasis. Criminalized by the state, the Maoists have been portrayed as a threat, with Operation Kagar deploying strategies that jeopardize their activities. This operation weaves together economic, cultural, and political motives, allegedly with drone attacks on Adivasi homes.

Why do we mostly resist and refrain from communicating on sanitation topic?

By Nikhil Kumar, Mansee Bal Bhargava* According to UN SDG Progress report (2022), at the present moment no targets for SDG 6 are expected to be met by 2030. In 2022, 2.2 billion people had no access to safe drinking water and 3.5 million lacked safe sanitation. Approximately 50% of the world’s population was reported to have been under resourced in enough water for part of the year and a quarter of that population was living under “extremely high” water stress. Add to it, droughts have affected over 1.4 billion people between 2002 and 2021.

CCG raises concerns over Indian State of Forest Report 2023 in open letter to environment minister

By A Representative  The Constitutional Conduct Group (CCG), a collective of former civil servants, has expressed serious concerns over the Indian State of Forest Report (ISFR) 2023 in an open letter to the Union Minister for Environment, Forests & Climate Change. The group has criticized the report's delayed release, flawed methodology, and misleading claims regarding the state of India's forests.

अल्पसंख्यक कार्य मंत्रालय का बजट निराशाजनक: 19.3% अल्पसंख्यकों के लिए मात्र 0.0661% ठोस आवंटन

- मुजाहिद नफ़ीस*   1-2-2025 को भारत सरकार द्वारा संसद में वर्ष 2025-26 का बजट वित्त मंत्री निर्मला सीतारमण जी ने पेश किया| इस वर्ष का बजट 5065345 करोड़ है जो कि पिछले साल के संशोधित अनुमान से लगभग 7.39% की बढ़ोतरी हुई है| वहीं अल्पसंख्यक कार्य मंत्रालय का बजट मात्र 3350.00 करोड़ है जो कि कुल बजट का 0.0661% लगभग है|  पिछले साल 2024-25 में 3183.24 करोड़ था|