In our special segment called 'It’s The Economy', we try to understand if there is generally an increase in consumption when the government announces rural sops or farm income schemes.
In an interview with CNBC-TV18, Sunil Duggal, CEO of Dabur, spoke at length about demand pick-up.
Duggal said there is a fall in demand and there is no doubt that it's in both, urban as well as rural markets. Duggal blamed tight liquidity, agrarian distress and joblessness for the reduction in demand. However, he said this is a temporary phenomenon.
“The stimulus which was promised by the government has not yet flown in but it will over the next few weeks and that should mean that there will be some demand pickup,” he said.
Talking about election spending, Duggal said, “The spending seems to be comparatively muted this year. There is a liquidity issue and we do not see that kind of pre-poll spending as we did in the earlier elections. So overall, there is a serious liquidity issue which is impacting our trade."
On the business front, he said, “If the monsoon is good, the economy picks up and stimulus happens to the level which is promised, then the growth could trend back into double digits. But at the moment, high single digit is something which we are looking at ..."