A slowdown in Indian economy – Asia’s third largest economy – has hit demand for everything from automobiles to retail products, forcing companies to curtail production and lay off their employees. India’s largest biscuit maker Parle Products Pvt Ltd too has been hit by the sluggish economic growth and increased GST on biscuits.
As quoted in several reports, the company said that demand for its products has diminished in the past two quarters.
Mayan Shah, category head at Parle Products, held higher slabs in Goods and Services tax and lack of adequate government stimulus responsible for the slowdown in demand.
“We have sought reduction in the goods and services tax, but if the government doesn’t provide that stimulus, then we have no choice but to let go of 8,000-10,000 people,” said Shah.
Parle, founded in 1929, is popular for its Parle-G and Marie brand of biscuits. The company employs about 1,00,000 people, including direct and contract workers across 10 company-owned facilities and 125 contract manufacturing plants.
Parle is not the only food product company to have flagged a slowing demand. Britannia Industries market shares declined more than 3 per cent since it announced its first-quarter results on August 9, 2019.
To recap, India’s gross domestic product (GDP) growth has slowed to 6.8 per cent in 2018-19 — the slowest pace since 2014-15. Last week, Prime Minister Narendra Modi had reviewed the state of the economy with Finance Minister Nirmala Sitharaman and other top officials of the finance ministry.