Our endeavour should be to grow the economy and ensure jobs are getting created: Marico chairman

Marico Ltd.’s chairman Harsh C. Mariwala says that the fall in economic growth during the last quarter is worrying. He was in Chennai for an event for his not-for-profit imitative Ascent in association with TiE Chennai.He says the intensity of threat from Patanjali for FMCG companies has come down. Excerpts from an interview:

As we head into an election year, what are your views on the Indian economy?

[For the] economy, if you see the last quarter’s figures, the growth rate has fallen.

And, I don’t know what the reason is.

We expected the growth rate to at least sustain or to improve.

One reason could be that the financial sector is in a bit of stress and we have seen lending to businesses has reduced because of lack of liquidity.

But the drop in growth is worrying, because the trend is not good. All of a sudden, from a level 7-7.5% it has gone down to 6.5% Hope it improves.

There has been huge debate about jobs data. Your views?

In a way, it is related to the growth of the economy.

If there is economic activity in terms of expanding capacities and more investments, then there would be automatic job creation. Our endeavour should be to grow the economy and ensure that jobs are getting created.

There has been a stress in the agriculture sector. Has this impacted the rural demand for FMCG sector?

Rural economy is not only dependent on agriculture.

It’s beyond agriculture, there is service element to it, there is manufacturing.

I agree the agriculture part of the rural economy is not doing well, but the other part seems to be holding on well. Because, for most FMCG companies, the rural demand has not fallen. In many cases, it is higher than the urban demand also. So, the crisis is not getting reflected in our sales to rural. And, it is not bad as it is made out to be.

Your thoughts about reforms like GST?

Now, we are seeing certain stability in GST revenues.

The collections have not been bad, despite the reduction in rates on certain items.

The GST seems to be stabilising. I think the government’s thrust on simplification and rationalisation of rates is having its positive impact.

I think much more can be done in terms of condensation of rates and to have lesser number of rates in terms of certain sections evading the GST.

I think the government is at it and I think it is just a matter of time.

The GST journey should be seen in continuity. It’s an important reform.

You can’t say that it is launched and we will start seeing the impact. I think the GST Council has done a good job in terms of plugging the loopholes and in reducing the rates.

Going forward, they will continue the simplification of GST and we will see the long-term benefits coming in.

You have been skeptical about Patanjali. Your views now?

We have seen in the last quarter, Patanjali has had issues in terms of sales and distribution. They had lot of problems in terms of pricing and distributors. They seem to be rectifying that. In the last quarter, especially, their momentum has dropped. I think they need to fix that. You can’t write them off. But the intensity of threat, what it used to be, has reduced from what it used to be.