FMCG cos foresee pre-DeMo growth rates only by April
Sagar Malviya & Neha Tyagi
Mumbai: Indian consumer-goods companies need to wait until April for revival of growth that appeared stunted after the November 8 currency swap, which crimped the purchasing power of millions of rural households using cash to buy shampoos, soaps or packaged cookies.
Over the past decade, sales of branded daily-needs in the nation of 1.3 billion people have increasingly relied on the vast rural hinterlands, home to about 800-million-plus people whose purchase behaviour is largely linked to farm output. Therefore, annual monsoon rains that help irrigate Indian farmlands play a vital role in shaping buying patterns in Asia’s third-biggest economy, and below-par rains over the past couple of years are often blamed for stagnant sales growth at companies such as Hindustan Unilever, Colgate, Dabur or Parle.
Prime Minister Narendra Modi, who’s been seeking to persuade Apple chief executive officer Tim Cook to set up plants in India, tweeted a media report on Saturday that it would start making iPhones in Bengaluru soon. Meanwhile, people familiar with the matter have said the company is still in talks with the government over concessions regarding local manufacturing.
When asked about the final call on IGST exemption, Adhia said the decision would lie with the GST Council.
GST will subsume central taxes such as central excise duty, services tax, countervailing duty and state taxes including value-added tax, octroi and purchase tax. It is expected to be imple- mented from July 1. Countervailing duty is levied as part of import duty in lieu of central excise duty. The Cupertino-based company had sought the central government’s assurance on CVD exemption for electronic components for 15 years as it looks to set up factories in India. The company has also sought relaxations under the modified special incentive package scheme (M-SIPS). The government scrapped the exemption for populated circuit boards (PCBs) in the February1Budget. It had removed CVD exemption for three components, including PCBs, in the last Budget, but restored it following industry demand. The exemption has been abolished to boost the Make in India programme.
Apple wants the exemption as its components makers may not relocate immediately to India, increasing its dependence on imported parts.