Inflation and the state of the market are always of concern and it is imperative for India to ensure not only that inflation is contained but that the economy is also growing, the Managing Director and CEO of India said on Tuesday. ‘Hindustan Unilever, Sanjiv Mehta.
Measures taken by the government, such as expanding the free food grain program, increasing subsidy spending on fertilizers and lowering fuel duties, would help overcome the current challenges, he said. he said during a virtual press conference on the results.
Mehta also suggested that the government could use the “huge amount of reserves” to prevent the rupee from depreciating rapidly.
“Inflation is still a big concern, the market is still a concern. These factors have not gone away. Market volume growth (FMCG) still remains at minus 5% over the past three months. It hasn’t turned positive at all and the value growth is of course 7%. The growth is mainly due to price growth,” he said.
Retail price inflation in India was 7.01% in June.
From a macroeconomic point of view, Mehta said: “For us, it is very important to manage inflation.
While an interest rate hike is inevitable to get inflation under control, he said it should be done in a way that doesn’t constrain the economy.
He added: “The imperative for the country is not only to ensure that inflation is contained, but above all, that the economy continues to grow.”
If the economy continues to grow at a level of 7%, as the IMF predicts, that should bode very well for the country, Mehta said, adding, “We should then be able to get through this huge crisis fairly much better than most major economies”.
When asked if the government had taken these steps to ensure growth while controlling inflation, he answered in the affirmative, pointing to measures such as the extension of the free food grain program and the increased spending on fertilizer subsidies, which would help boost rural demand.
In addition, he said the reduction of fuel excise duties by the Center and many states “would clearly have a dampening effect on inflation.”
About the fall of the rupee he said you don’t want the currency to depreciate at a very high rate and you would like a very moderate approach, it has to be done in a contained way and today we have a huge amount of reserves that can help us do that.
Mehta also said a glimmer of hope and optimism is a good monsoon, which bodes well for the economy.
“There are still pockets of India, especially the central belt, where the monsoons have not been good yet, although forecasts indicate that the monsoon may cover up. So if the monsoon covers up, then she should definitely be good, definitely be a good postman,” he said.
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