Parle company to fire as many as 10,000 people if the slump in consumption continues, signalling that the Indian economy has slowed down.
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.
The maker of popular brands such as Parle-G, Monaco, Milano, Hide and Seek biscuits and Mango Bite toffees has a turnover of more than Rs 10,000 crore, and it employs 1 lakh people. Parle operates 10 company-owned manufacturing facilities, in addition to 125 third party plants. The company’s more than 50 per cent of sales come from rural markets.
Mayank Shah, category head of Parle Products, told a leading financial daily, “We have sought reduction in the goods and services tax (GST) on biscuits priced at Rs 100 per kg or below, which are typically sold in packs of Rs 5 and below, but if the government doesn’t provide that stimulus, then we have no choice but to let go of 8,000-10,000 people from our workforce across factories as slowing sales are severely impacting us.”
Under the previous tax regime, the sub-below Rs 100 per kg biscuits were taxed at 12 per cent, and companies had expected the goods and services tax (GST) rate to be fixed at 12 per cent for premium biscuits and 5 per cent for the lower-priced ones.