GST cut will give impetus to demand: Tata Consumer's Sunil D'Souza

Tata Consumer MD Sunil D'Souza says GST cuts and increased government spending will put more money in consumers' hands, boosting demand and driving long-term growth

The recent slashing of goods and services tax (GST) on fast-moving consumer goods (FMCG) will provide a definite impetus to demand, while also causing a structural shift in the economy, said a top executive at Tata Consumer Products. 

“Between the reductions of tax slabs, bringing government spending back and reduction of rates, there will be a structural shift in the economy, putting more money into the hands of the consumer, thus driving consumption and GDP growth,” said Sunil D’Souza, chief executive officer and managing director at Tata Consumer Products. 

D’Souza was speaking on the sidelines of World Food India, held at Bharat Mandapam on Thursday. 

“Urban demand bottomed out last year this time, when food inflation was high and government spending had not picked up after the elections. A year later, things have been improving consistently. It is set to accelerate and will last beyond the festival season,” he added. 

The most difficult part of the GST transition has been adjusting price points, according to him. “The toughest thing is to change the grammage, especially in sachet or PET bottles, where moulds have to be changed to pass on the benefit to the consumers. For now, we have reduced the MRPs in the smaller packs, but over a period of time we will figure out how to give more grammage back,” he said.