Inflation a concern but India growth story intact – Sanjiv Puri, CMD at ITC



ITC chairman and managing director Sanjiv Puri said inflation is a concern on volumes but despite the Ukraine-Russia conflict and rising prices in the middle of the pandemic, the growth story in India is ‘very much intact’.

“No doubt, we are faced with uncertainties but it would be useful to step back and look at the larger picture. What are the drivers of consumption? Inflation is just one parameter. But it’s not the only parameter. During the pandemic, we had very resilient performance, good results, buoyancy in tax revenues and a very growth-oriented budget,” Puri said at the Times Network’s India Economic Conclave 2022 on Friday in Mumbai. “If you look at the fundamentals, I think the growth story and the promise of India are very much intact.“

The cigarette to cookies conglomerate, which faces the highest exposure to agriculture within the consumer products market in terms of sales as well as sourcing said there is no reason to hold back or get despondent and if one has the right strategies and competitiveness, one should be able to thrive in whatever type of new normal emerges.

“Inflation is a challenge. But on account of the conflict, there are rising prices of agri-commodities on one side which is creating inflation, and on the other hand, is going to pump a lot more money into the rural economy. The crop is also good with higher realizations. Input costs have increased but the net is a positive,” added Puri. “Monsoon this year is also expected to be normal, and I think rural should be in a better position than what it is today.”

Over the past decade, sales of branded daily needs in the nation of 1.3 billion people have increasingly relied on the rural hinterland, home to more than 800 million people, whose purchase behaviour is largely linked to farm output.

Addressing the conclave under ‘The Great Indian Consumption Boom’, the company said interventions by both companies as well as the government will bring in efficiencies, jobs and better incomes which will increase demand in the country where the penetration levels and per capita consumption levels are still very low.

Packaged consumer-product volumes fell 1.8% in the December quarter, the second consecutive decline, led by rural markets where consumption dipped 4.8%. Most consumer goods firms have warned in recent quarters that prices would continue to rise amid the highest levels of inflation in decades. The prices of everything from soaps and skincare to cookies and snacking products have gone up already by 15-20% over the past year and companies expect a further decline in volume growth.


Source link