The neighbourhood shopkeeper has been hurt more than modern retail chains in consumption slump, and the industry will have to evolve innovative solutions to come out of it, Marico Chairman Harsh Mariwala has said.
He termed the slowdown in consumption -- a major factor blamed for pulling down GDP growth to a six-year low -- as a "phase".
The economic growth slowdown is a "reality" but all should keep a forward-looking approach to come out of it, he told PTI.
"While modern retail is showing better numbers, it is at the cost of general trade. It is just that one channel is compensating for the other channel. However, an overall low pick-up is a reality which is what FMCG (fast-moving consumer goods) companies have been progressively experiencing," Mariwala said.
There is a need for the government to unleash both short-term and long-term reforms to reverse the slowdown, he said adding that there is no quick fix or set formula to fight the same.
Listing out potential measures that can be taken, he pitched for making companies with less than Rs 1 crore revenues pay GST on a quarterly basis rather than monthly, reduction in the GST slab rates, adoption of direct tax code, bringing down land costs, reduction in real interest rate and upskilling incentives for auto workers to work on electric vehicles.
To push up the consumption demand, Mariwala said the government needs to take steps to increase liquidity in the market and boost sentiments.
He said businesses need to be innovative and take an opportunistic view of things by making fundamental improvements in their models.
Companies need to look internally to counter cyclical "problems", he said adding that some companies have thrived in the worst-performing sectors by doing something impactful for the customers.
"Businesses should not get swayed by the Indian economy not growing at higher growth rates. They should do something so that they stand out and they are certain to reap the rewards that come with making that effort," he said.
Mariwala said inclusion of research and development spends as part of the corporate social responsibility (CSR) mandate will act as a nudge to companies to look at innovation, and also give rise to public-private partnerships. He also said there is a need for changes in the education system, which depends excessively on rote.
"With too much emphasis on standardised test results and benchmarking, the education system can stifle children's natural creative ability making it difficult for them to be innovators later in life," he said.
Offbeat approaches and methodologies that stir curiosity and instil fearlessness among the children is also needed, Mariwala said.
In India, many sectors like agriculture are ripe for innovation, which requires attention on productivity, processing and supply chains, he said.
Mariwala said that having benefitted from innovations as an entrepreneur, he has started the non-profit Marico Innovation Foundation.
"We believe that innovation can spur creation and sustenance of successful and enduring Indian brands. That will enable India to reposition itself as a global economic superpower," he said.