While fleeting confidence level in the economy is one area that experts believe need to be worked upon, the government can also look across all tax rates; especially reduction in corporate taxes, Vikram Kirloskar said.
The consumer slowdown which has hit Indian economy of late is not just a phenomenon in the country, but is rather what is being seen across the world as well, said Vikram Kirloskar, President, CII, in an interview with CNBC TV18. Forecasting that the trend will continue, he added that there is a dire need to alleviate slowdown. Several reasons have played out against the growth and the government will need to work aggressively to revive the economy and achieve a 10% growth agenda in the coming years, Vikram Kirloskar added. Among many reforms that the government can implement to control the ailing demand, Vikram Kirloskar said that unleashing animal spirits should be the major priority of the government.
Other issues that plague growth
While fleeting confidence level in the economy is one area that experts believe need to be worked upon, the government can also look across all tax rates; especially reduction in corporate taxes, Vikram Kirloskar said. Cutting tax rates will mean more money in the hands of the customers. The same was also echoed by veteran market analyst Rama Bijapurkar who had earlier said that people spend more when they have more. Although, she had proposed handing out cash instead of tax reductions to that end. The prevailing liquidity crisis caused by the NBFCs has also resulted in the slowdown as people face a cash crunch.
Consumer slowdown had become evident after many FMCG players recorded single-digit growth in their quarter revenues. Agrarian crisis, rural distress, prolonged winters, and NBFC crisis are some of the reasons attributed to the slowdown. Meanwhile, many industry players and experts have talked about the ongoing crisis. While some of them opine that the sluggishness in the consumer sector is a cause of worry (Biocon founder Kiran Mazumdar Shaw, ITC, Britannia, Patanjali, Emami, Dabur etc), there are others as well such as Amul who have dissed the consumer slowdown narrative entirely and said that results of one quarter cannot be seen as a correct reflector of the economy.