The government must speed up the implementation of the Goods and Services Tax (GST
) in order to ease inflation across sectors, Adi Godrej, chairman, Godrej Industries said on Monday.
"The high inflation rate is a matter of concern for India Inc that is putting increasing pressure on the profit margins of the companies," Adi Godrej, chairman, Godrej Industries, said.
"I think due to this very reason the government must strongly focus on early introduction of the GST, because it will cut costs by five to seven per cent directly on nondurable consumer goods," Godrej told Mail Today at the sidelines of AIMA foundation day function where he was conferred the JRD Tata Corporate Leadership Award.
Godrej said he would like the Budget to extend more tax exemptions to the common man so that it will lead to higher growth in gross domestic product (GDP). "I have repeated it earlier also that the Budget needs to address the larger economic issues that is affecting not only growth but can also dampen the sentiments," Godrej said.
"As per my wish list from this budget it is too early to implement the GST (Goods and Services Tax).
Till that time, the government should continue with the existing excise duty," Godrej added.
The profit margins of the fast moving consumer goods (FMCG) sector have been affected severely by spiralling input costs.
Most of the companies have underperformed.
Hindustan Unilever Ltd (HUL) performed poorly despite its aggressive marketing and some other prominent names like Dabur, Marico, Emami and Godrej Consumer Products Ltd (GCPL) recorded only marginal profits.
Companies cite high cost of food items, vegetable oils and other input costs such as packaging as major factors that are putting their margins under pressure. The sector says packaging alone contributes 30 per cent of the product cost. "We have urged the government to provide fiscal incentives to promote packaging which is environmental friendly, recyclable and sustainable," Atit Bhatia (senior vice- president), Hindustan Tin Works Ltd, a packaging company, said.
"It is extremely important that ident), Hindustan Tin Works Ltd, a packaging company, said"It is extremely important that ident), Hindustan Tin Works Ltd, a packaging company, said.
Courtesy: Mail Today