The Bhartiya Janata Party (BJP) poll manifesto outlines a slew of economic, social and administrative reforms.
Commenting on the party's manifesto and the strong likelihood of the National Democratic Alliance (NDA) assuming power at the Centre, Adi Godrej, chairman of Godrej Industries , is hopeful that the NDA government will be reformist and pro-development.
"Administratively, they should take steps to ensure that projects go through," Godrej said.
The slowdown in the economy has slowly spread to FMCG sector as well. Forecast of weak monsoons could make matters worse for the sector, investors fear.
Also Read: FMCG unlikely to post strong Q4 performance: Barclays
Godrej agrees that a poor monsoon can hurt demand. "But generally, a good or bad agricultural season does not affect the FMCG too much. Like this year, the monsoon and agriculture has been excellent, yet the demand has not been that great," he said.
Godrej said the GDP growth in developing economies is likely to improve in 2014-15. "Even the currency depreciation which had affected businesses such as in Indonesia has been corrected to a certain extent. So we expect 2014 to be a better year for our international businesses," he said.
Godrej Properties , the real estate development arm of the Godrej Group, on Monday announced a new residential township project in Bengaluru.
Speaking on the development Godrej said: "We have announced several new projects by Godrej Properties in the recent past. We have a large project coming up in Panvel and we have announced a township project in Bengaluru."
He said the most demand for residential real estate, not for actual use but for investment, has slowed down considerably because of negative sentiments. But he thinks the sector can see improvement, post government formation.
Below is the interview of Adi Godrej, Chairman of Godrej Consumer Products with Anuj Singhal and Ekta Batra on CNBC-TV18.
Anuj: What is your reaction to the Bharatiya Janata Party (BJP) manifesto because a lot of people believe that the opinion polls are to be believed that is the next formation that we are looking at at the center, from whatever you heard already, were you happy with it?
A: I haven't been able to go into it in detail nor have I got a detailed report but it seems generally quite good. It is quite clear that if we have National Democratic Alliance (NDA) government as is predicted by the polls, they will be very growth-oriented. They will try and correct some of the reasons why our growth has decelerated and some of the negatives such as the retrospective amendments in the tax laws etc will sought to be corrected. So I feel it will be very good for the economy if they can form a government without too many hitches in terms of having to take support from people who are not likely to support their main agenda.
Anuj: What is the first economic step which you would expect the next government to take?
A: I think the budget will be soon introduced in June or July. I expect they will take steps to see the rates of taxes are moderated so that the economy can grow again. They will take steps to ensure that the negative perception created by the retrospective amendments is corrected and administratively they will take steps to see that the projects go forth, there has been a lot of slowdown because of bureaucratic concern and because the politicians couldn't agree among themselves, I think they will change that trend.
Ekta: There are lots of concerns that because of the El Nino we might not see an adequate monsoon this year even for India. In that sense do expect a slowdown coming into the rural as well as the urban markets within India and what would your volume projections possibly be?
A: No, I think there is currently a slowdown in fast moving consumer goods (FMCG) demand compared to a year ago and I think that is because of the negative sentiment. I think if the economic situation improves as a result of a growth oriented government coming into power, I think that will change. I expect demand to pick up. As far as the El Nino first of all not depends on the intensity of the El Nino effect and if we do have the poor monsoon, yes it would have some effect in terms of rural demand but generally the agricultural season being good or bad does not affect FMCG too much. If you look at this year when the agricultural season was excellent, the monsoon was excellent. In fact demand has come down a little. So I don't expect that will have much effect. Much more important will be the type of new government we have in place whether it will be growth oriented or not.
Ekta: What about the international business because there are some reports indicating that your margins are expected to be supported overall because of an expansion in the international business margins in FY15, how is that doing because we do understand that you have recently taken price hikes in Indonesia as well?
A: I wouldn't like to make any comment on that because we are in the quiet period currently until our results are declared but generally we expect good progress. I mentioned this before and I think all the developing economies are improving now. We expect gross domestic product (GDP) growth in the developing economies to be better in 2014 then in 2015. Even the currency depreciation which had affected businesses such as in Indonesia etc has been corrected to a certain extent. So we feel that 2014 should be a better year for our international businesses by and large.
Anuj: You announced an important development this morning this new township project in Bangalore. Can you give us some details on how much will it add to Godrej Properties?
A: We have announced several new projects in Godrej Properties in the recent past and we have a large project in Panvel coming up, yes we have announced this project in Bangalore. We have other projects in Bangalore and other parts of the country. Godrej Properties has added several new projects and we feel again if we have a growth oriented government the general sentiment in the real estate sector will improve dramatically. And a sentiment improvement could lead to tremendous increase in demand. Currently most demand for investment in residential real estate not actual use but in investment has slowed down considerably because of the negative sentiment. That has the capability of turning around rapidly if we have a strong growth oriented government in place.
Anuj: What about Panvel and Bangalore in particular because these have been two areas where a lot of fresh investments have come in, fresh triggers as well especially for Panvel. What has been the scenario over last few months in these two areas?
A: Very strong. Some of our announcements have been greeted very strongly. Even prebooking opening enquiries have increased considerably. I expect the whole real estate sector will do much better in 2014 than in 2013. Again as I mentioned if the economy of the country turns around as I expect it will, the entire real estate sector will do well and I think Godrej Properties is very well poised to take advantage of that turnaround because we have announced several new projects, we have got into several new agreements which are all low capital based agreements and that can add tremendous value to the company in a couple of years to come.
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