Numerical Highlights of the Week: Corporate Profits Soar, While Wages Remain Stagnant; Challenges in Snacking Trends and a Surge in Content Takedown Requests.

Numerical Highlights of the Week: Corporate Profits Soar, While Wages Remain Stagnant; Challenges in Snacking Trends and a Surge in Content Takedown Requests.

“While corporate profits have achieved unprecedented highs, wage growth has come to a standstill. Simultaneously, a concerning 76 percent of India’s leading packaged food companies’ revenue stems from the sale of unhealthy products.”

Photo by Morgan Housel on Unsplash

“Despite corporate profits reaching record levels, wage growth has remained stagnant. Meanwhile, a noteworthy 76 percent of the revenue generated by India’s top packaged food companies originates from the sale of unhealthy products.”

“Weekly Numerics presents a snapshot of the past seven days, highlighting key figures through three to five charts based on major events or intriguing data points.

Unhealthy Snacking:
In a revealing analysis of 1,901 products from the leading 20 FMCG companies in India, a report by the Access to Nutrition Initiative, a non-profit organization, discloses that a staggering 76 percent of their revenue is derived from the sale of unhealthy food products. These companies collectively hold a substantial 36 percent market share.”

“Within the analyzed data, a significant 55.6 percent of packaged food products from these companies were categorized as ‘least healthy,’ receiving a rating of 1.5 or less out of five. This emphasizes a concerning prevalence of less nutritious options within the examined offerings.”

“The non-profit organization based in The Netherlands stated in its report that the mean healthiness of the companies’ products averaged 1.9 stars out of 5.0 (2.0 when data were weighted by sales), with notable variation observed among different companies. According to the World Health Organization South-East Asia Region criteria, 12 percent of the products were deemed eligible for marketing to children. This percentage increased to 21 percent after sales-weighting was applied.”

“On average, Indian authorities submitted over five content takedown requests to Google per day. On a global scale, Russia led in the number of content removal requests sent to Google, accounting for almost two-thirds of all such requests worldwide. Additionally, there was a notable 50 percent increase in content removal requests globally in 2022, with Indian requests experiencing a 26 percent rise compared to the previous year.”

“Defamation emerged as the primary rationale cited by Indian authorities in justifying their content removal requests to Google, accounting for over 20 percent of all such requests made over the past decade. On a global scale, the majority of content removal requests were framed in the context of national security concerns.

Corporate Profit Rises, Wages Stagnate:

In the quarter ending September, listed Indian companies collectively generated over Rs 3 lakh crore in net profit (profit after tax), as reported by the Centre for Monitoring Indian Economy. The net profit of 4,303 companies that have released their financial statements so far totals Rs 3.05 lakh crore. Although slightly lower than the net profit of Rs 3.14 lakh crore reported by 4,625 companies in the quarter ending June, the September quarter figure is expected to increase further as more companies publish their financial statements. Notably, the net profit of listed companies now constitutes almost 5 percent of India‚Äôs GDP. Despite this surge in profits, the data reveals that wages have largely stagnated in recent quarters.”

“In the quarter ending December 2022, Indian companies disbursed Rs 2.5 lakh crore in wages. Subsequently, over the following three quarters, wage growth nearly stagnated, registering at 4.8 percent, 1.4 percent, and 0.1 percent. In contrast, Profit After Tax (PAT) excluding prior period and extraordinary transactions experienced a rise of 14.7 percent, 7.2 percent, and 2.6 percent during the same period.

According to the Centre for Monitoring Indian Economy (CMIE), the corporate sector is following an unconventional route to profit, seemingly enjoying a relatively unfettered trajectory. In the September quarter, profits surged by 39 percent, outpacing the growth in labor costs (9.5 percent) and net fixed assets of non-finance companies (8.2 percent). Notably, non-finance companies achieved profit growth despite a 1.5 percent decline in overall revenue for the second consecutive quarter.

The finance sector also thrived, even without lending to non-finance companies. Banks aggressively extended loans to other finance institutions, which, along with banks, lent to households.

The limited growth in assets and wages, coupled with reduced access to capital in the September quarter, impeded the corporate sector’s revenue growth. Paradoxically, this unconventional scenario concurrently contributed to the corporate sector attaining record profits.”

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