New Delhi [India], Jan. 17 With a slump in the economy following the government's demonetisation drive, the Fast Moving Consumer Goods (FMCG) sector has suffered in terms of production and expenditure.
The consumption level of the consumers has decreased leading to an overall impact on the sector. The visible impact has, however, been way lesser as compared to other sectors. Govind Ram Choudhary, MD, Anmol Biscuits, expressed hope the effect of demonetisation will diminish in the coming months and business conditions will get back to normal.
"Since we are a FMCG industry and make food items, the impact hasn't been that great. The numbers we got from Nielsons were at -40 percent. In December, they expect the numbers to be at -20 percent. We think that the effect will vanish around the month of February," Choudhary told ANI in an interview.
"The 40 percent-decrease has been due to the shortage of cash as most of items of our industry get sold through small-scale shops.
People don't have enough cash to pay to the shopkeepers and hence, they are operating through small debts," he added.
Choudhary further said demonetisation can be understood in two ways. "I know there are many companies, which hoard black money and demonetisation can be a good way to eliminate black money from the country.
And it's a big opportunity for companies like ours, which does not indulge in any sort of black money hoarding.
Demonetisation can prove to be a big opportunity for expansion," he said. The FMCG brand, Patanjali, is currently ruling the business with an annual growth rate of 146 percent, with a turnover of (Dollar) 769 million for the 2016 financial year, thereby posing a serious competition to others in business.
Choudhary, however, begged to differ and said that Patanjali hasn't posed a very big competition to his company.
"It has become a competition for the market leaders - Britannia, Parle, not for regional companies like ours.
With the emergence of Patanjali, I think the consumption of biscuits has only increased and the industry is increasing," Choudhary said.
When asked about his expectations from the Budget, Choudhary opined that the Corporate Tax should decrease.
He said, "We expect a lot from the budget. People and business have largely been affected by demonetisation and other rules, so we expect that the Income Tax rates should come down.
The Corporate Tax should become 25 percent and the Personal Income Tax must also decrease." Anmol Bakers is a family-held business that operates with a network of more than 15 lakh retailers.
Source: ANI
