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Adi Godrej, Chairman - Godrej Industries
Jan 20, 2017 | Source: Zee Business
Demonetization will bring benefit in long term in long term and ones GST is implemented he expects double digit growth in India
Demonetisation is a good move for long term growth. Black money will reduce; fraudulent notes coming from across the border will decrease leading to decline in naxalism and terrorism. I think it will bring along benefits in long term even if we witness shortage of cash and economic difficulties in short term. However, the difficulties that were witnessed in November have reduced considerably in December. Additionally, it will be restored in the coming few months and hence the sales losses will be restored as these stocks would also be replenished.
According to management, consumer off-take especially in FMCG for December has been better than the same period last year. He sees restoration already since the company’s quarter has also gone well. According to him replenishment will be visible in January and therefore the economy will not bear much loss. Sufficient cash inflow is expected from January and the hesitant consumers will be back in the market. After remonetisation, the stocks will replenish and there should be normalcy in growth by March.
According to Mr. Godrej, the upcoming budget will have many direct tax incentives and there will be reduction in direct tax rates. The greater the reduction in rates, better it will be for the economy. High direct taxes have never benefited any country, while low direct taxes always trigger economic growth. Therefore, he expects this will be implemented and we should see increase in government revenues. Additionally, the deposits that have come into banks after demonetisation will see taxes and penalties in many cases leading to increase in government revenues. Hence, the government will be able to do this and control the fiscal deficit.
Rural sector will be in the forefront. There was a lot of negative effect due to two bad monsoons. However, the last monsoon was good and I hope this monsoon will also be good. I expect this budget to implement some government policies which will help to increase the productivity of the rural sector. I believe this will benefit the rural sector and our business (Godrej Agrovet) which is well connected to the rural market would also gain.
Share Market
FMCG
Demonetisation
Good Reads
Godrej Industries
good move for long term growth