The demand in the rural sector will be crucial to assess this year after the second wave of the COVID-19 pandemic in the country, Sanjiv Mehta, Chairman, Hindustan Unilever Limited (HUL) told NDTV. ''On a per capita basis, the rural sales of FMCG are one-third to that of the urban...which is a low base, but two-thirds of the people in the country stay in rural areas, so it is important that the demand in the sector stays resilient'' said Mr Mehta, in an exclusive interview to NDTV.
The comments from the industry leader come at a time when the country is emerging from the deadly second wave of the COVID-19 pandemic and states have begun to reopen after lockdowns were imposed to control the spread of the infection.
The fast-moving consumer goods (FMCG) sector remained in focus amid the pandemic, as the demand for goods was impacted last year due to the closing of physical stores, social distancing norms, and restrictions on manufacturing units. However, during the second wave of the pandemic, all 29 factories of the country's leading consumer good company HUL, were operating, according to the Chairman.
Mr Mehta describes that the situation this year ''is not as bad as last year'' when consumers were panic buying after the imposition of the first nationwide lockdown when the COVID-19 pandemic had just hit the country.
''This year, as the lockdowns were localised and factories kept running across the length and breadth of the country...so, there was no pantry loading or panic buying,'' said Mr Mehta, who is also the Senior Vice-President of industry body Federation of Indian Chambers of Commerce and Industry (FICCI).
The virus had hit the rural sector too amid the second wave, which impacted the distribution of goods and wholesale trade in some areas this year, he explains. ''Some of the wholesale mandis and the distributers got impacted to some extent due to localised lockdowns,'' claims Mr Mehta.
For the demand in the rural sector, Mr Mehta remains optimistic and said that if the rainfall is good and the harvest is uninterrupted then it will augur well for the sector. Most parts of the country are likely to receive average to above-average monsoon rains this year, according to India Meteorological Department (IMD). The weather department noted that India may receive 101 per cent rainfall of a long-term average this year, raising expectations of higher farm output.
Moreover, the timely intervention by the government such as the additional outlay of food grains for the poor is a good sign, according to the industry leader.
Under the Pradhan Mantri Garib Kalyan Yojana, the government today approved the allocation of additional food grains for another five months - between July to November 2021, at Rs 5 per person per month to 81.35 crore beneficiaries, who are covered under the National Food Security Act.
As soon as the states re-opened after the relaxation of lockdown restrictions, the demand picked up in the rural sector. ''The initial indicators are pointing that the rural sector will remain resilient, although it is still too early and we would need a few more weeks to assess, the signs are good,'' said Mr Mehta.
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