Slowdown not the end of the world, higher DA will spur growth; says Nestle

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Published: October 10, 2019 5:22:19 PM

While FMCG companies have been blaming slowdown for lower sales for close to nine months now, one of the leading global FMCG companies Nestle’s India arm said that the world has not come to an end.

Nestle India, Nifty 50, FMCG companies, Britannia, Yes Bank, P/E stocks, Nescafe, KitKat, mutual funds, HULThere are several other factors that may help in sales revival for FMCG companies.

While FMCG companies have been blaming slowdown for lower sales for close to nine months now, one of the leading global FMCG companies Nestle’s India arm said that the world has not come to an end if growth has slipped from 10-12% to 8-9%, Suresh Narayanan, chairman and MD, Nestle India, told ET Now in an interview. Remaining hopeful of a sales revival, he added that the Narendra Modi government’s latest move to increase dearness allowance for government employees, pensioners and public sector employees is likely to spur demand, the news channel reported. “It is possible that with steps that the government has taken and is taking now … the latest one being the 5% increase in DA … all that will spur consumption,” he said. 

The Union Cabinet increased the dearness allowance on Wednesday on account of upcoming Diwali festivities and the move is expected to benefit over one crore people. As the government also relaxed Aadhaar-seeded data as a mandatory condition for release of funds to Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) beneficiaries, the same will enable immediate release of funds to farmers. 

There are several other factors that may help in sales revival for FMCG companies. While rural India is expected to have better income thanks to good monsoon in 2019, the investment climate in the country has also improved. The government has taken measures in the past months to that extent including corporate rate cut. Commenting on the same, Suresh Narayanan said, “I am hopeful that in the next couple of quarters, we will start bouncing back to the growth level we have seen and I would not really despair.” 

While India has entered festive season and FMCG companies were hoping that festivities will bring cheers to the dampened demand, the same has not spelt much success. “It has been a mixed bag .. I have not seen in my market visits, any dramatic change at least as far as consumer goods are concerned,” Suresh Narayanan said, the news channel reported. However, for 

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