Monetary Tightening and Corporate Resilience: A Comparative Analysis of Debt Sustainability and Profitability in Indian Manufacturing and Service Sectors (FY20-24)

Author(s)	Priyanka Sarode, Dr. M.S. Suganthiya
Country	India
Abstract	This study examines the impact of RBI monetary tightening (FY20-24) on debt sustainability and profitability of Indian manufacturing and service sector firms. Using data from 120 survey responses and supporting time series, we analyze sector-wise differences in debt growth, interest burden, profitability evolution and coping strategies. The study period encompasses the shift from aggressive accommodation during COVID-19 (repo rate: 4.00%) to substantial tightening to control inflation (repo rate: 6.50%), followed by recent easing measures. We find that manufacturing firms experience higher debt stress and lower resilience than service firms, which leverage higher margins and pricing power to weather monetary shocks. The policy and practical implications for monetary authorities and corporate strategists are discussed.
Keywords	Monetary policy, debt sustainability, interest coverage ratio, profitability, manufacturing, services, Reserve Bank of India
Field	Business Administration
Published In	Volume 6, Issue 6, November-December 2025
Published On	2025-11-24
DOI	https://doi.org/10.63363/aijfr.2025.v06i06.2158
Short DOI	https://doi.org/hbdsvx

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