Recovery in rural markets, improving employment conditions bodes well for near-term consumption: ITC

Mumbai: The Indian system is expected to prolong its “high growth” trajectory successful the existent fiscal, driven by beardown momentum successful infrastructure investments and a pickup successful backstage consumption, ITC Ltd said.

Growth volition travel connected the backmost of a moderation successful inflation, betterment successful cultivation trade, a bully rabi harvest and a mean monsoon, the hotels-to-packaged user goods institution said successful its yearly study for FY24, released connected Friday.

The institution pointed to "green shoots” of betterment successful the agrarian markets, improving employment conditions and a sustained momentum successful manufacturing and services that it said augur good for depletion request successful the adjacent term.

It said a favourable demographic profile, expanding affluence, accelerated urbanisation and accelerated integer adoption correspond immoderate of the cardinal structural drivers of economical growth. The government’s efforts to physique carnal and integer nationalist infrastructure, heighten competitiveness of the manufacturing sector, indirect and nonstop taxation and fiscal assemblage reforms and measures to beforehand easiness of doing concern are expected to powerfulness the economy.

“While stepped-up superior expenditure outlay and absorption connected infrastructure are expected to thrust maturation successful home manufacturing, absorption connected agri-related schemes are expected to boost farmers’ payment and agrarian depletion demand, spurring a virtuous concern employment-consumption cycle," ITC said.

The weakness successful depletion was reflected successful the muted measurement maturation of the fast-moving user goods (FMCG) sector, portion manufacture and the services sectors grew by 9% and 7.5%, respectively. Growth successful agriculture slowed to 0.7%, with adverse upwind events impacting harvests.

ITC, which has interests successful hotels, tobacco, FMCG and the agri sectors, reported standalone gross gross of ₹69,446 crore successful FY24, small changed from the erstwhile year. Profit aft taxation grew 8.9% to ₹20,421.97 crore. The company’s shares person declined implicit 5% successful the past year.

The system volition necessitate "structural support” successful sectors with ample economical multiplier impact. 

The institution besides pointed to curbs connected commodity trading that led to a diminution successful its agriculture exports. India banned wheat exports successful May 2022 and exports of non-basmati atom successful July 2023. Last fiscal, the company’s agri-segment gross fell 13% to ₹15,791.83 crore. 

The institution said enhancing cultivation productivity and worth summation to planetary standards, portion simultaneously improving marketplace linkages, stay captious to amended the sector's competitiveness and thrust a important summation successful farmers’ incomes. 

Additionally, ITC said the workplace assemblage faces threats arising retired of clime change. To beryllium sure, 65% of the country’s colonisation (2021 data) lives successful the agrarian areas and 47% of the colonisation is babelike connected agriculture for livelihood.

An exponential summation successful harvest accumulation and productivity, backed by clime astute agriculture, volition beryllium captious to conscionable the increasing needs of an expanding colonisation arsenic besides successful mitigating imaginable risks, it said. 

“The Government’s absorption connected promoting Farmer Producer Organisations (FPOs) holds immense imaginable to catalyse cultivation translation by leveraging economies of scale, enabling sustainable agriculture, supporting market-led accumulation and creating larger marketplace access,” ITC said.

Government interventions encouraging backstage and nationalist concern successful post-harvest activities including aggregation, modern storage, businesslike proviso chain, superior and secondary processing, selling and branding are steps that volition unlock the afloat imaginable of the agri sector, it added.