Godrej Group Chairman Adi Godrej on Thursday said that the rural demand for fast moving consumer goods (FMCG) will likely to have a double digit growth with a good monsoon.
“If the monsoon is good, the agricultural economy is expected to grow 4 per cent and rural economy will grow little more as there are others parts of the rural economy. I expect the demand growth in rural India for FMCG products should be double digit,” he said.
Godrej said last monsoon was good and demand in rural area for FMCG products has been quite good over the last year. Two monsoons prior to that were poor and that had impacted the rural demand.
He said input costs have come down in the last couple months.
“Input costs are reasonably under control and I do not see much price increase in FMCG sector over the next 12 months,” he said.
Godrej, however, said low Goods and Services tax (GST) rates will be critical to the sector.
“Overall, I expect GST rates to be lower than the present rates for FMCG products. So there will be scope for either price reduction or soften of cost increases. We will only know when final rates are announced,” he added.
“Following demonetization and remonetization, implementation of the Goods and Services Tax is expected from July. People are optimistic about India’s economic performance and country’s economy is expected do well,” he said.