Inflation positive for rural income growth: Vindi Banga

India's inflation concerns would impact the FMCG sector which will hamper the spending capacity for Indian consumer and the products in the space. Hindustan Unilever (HUL), in a recent interaction, pointed out that India is one of the toughest markets on a competitive basis for players in this space.

Vindi Banga, Senior Partner of Clayton Dubilier and Rice (CD&R) and former CEO of HUL spoke to CNBC-TV18's Sonia Shenoy and Mitali Mukherjee, where he said that inflation will eat into the disposable income of ordinary consumers in the end. He also believes that it would have some benefits from increasing food prices, as this will lead to greater growth in rural income which are dependent on the farm sector.
He further stated, "Companies will pass on some of the commodity costs to the consumer. Most companies are not planning to pass on the entire cost. They will have to find innovative ways of reducing the total system cost."
India's growth story seems to be heading nowhere and has been getting quite a bit of bad press lately. However, when asked Banga whether it would be a good option to invest in the Indian market, he said, "The Indian market has been growing at 8-9% GDP growth. Therefore, everybody's eyes are on India from around the world." Below is the verbatim transcript of the interview. Also watch the accompanying video. Q: What do you see in terms of the competitive environment for FMCG players in a country like India?
A: I don