Rural demand is witnessing a slight pick up, which is certainly some silver lining, said Sanjiv Puri, Chairman and Managing Director of ITC Ltd. A good crop, coupled with increased government spending on infrastructure, will lead to better demand uptick in the coming days, he said at the sidelines of the CII annual session on Wednesday.

According to Puri, a good crop is now being marketed, which should help with the demand scenario going forward. Rural wages are already on an upward trajectory and as incomes move up, it takes care of two-thirds of the rural population. “The other third (of rural income) will be determined by non-farm areas. And (the way in which) public works or expenditure on infrastructure is progressing, that (the remaining one-third section) also is benefitting. So I believe, rural demand will also pick up overtime,” Puri told businessline.

On the possible effects of El Nino on the rural income and demand, he said climate emergencies have emerged as the new risk, not only in India, but also globally. “While there are concerns, one view is that the impact will not be very severe. But this is something that has to be monitored,” he added.

Climate smart agriculture

In view of the emerging threats owing to climate change, there is a need to work on crops that are resilient to it. ITC has been working with farmers on “climate smart agriculture” for several years now and around 70 per cent of the districts — where the conglomerate has been working — are now in the “high yield and high resilience zone”, he said.

The company’s coverage (of climate smart agri practices) expands to over 2.3 million acres and 700,000-odd farmers are beneficiaries. The target now is to take it to 3 million acres and then add on. “Interestingly, in areas where climate smart agriculture has been practiced, not only have greenhouse gas emissions gone down, but also farmers’ income have gone up substantially,” Puri said.

Urban demand

On the other hand, the trend of premiumisation has sustained for the urban demand; there is also “some stress in the bottom-end”. In the lower-priced category, the growth in volumes “is not what it is expected,” he said.

According to Puri, India has managed inflation “very well”, especially with its policy interventions. And barring the uncertainty of climate change and its adverse impact on agriculture, the country continues to be in a much better space right now, than the rest of the world.

“The Indian economy continues to do well. The only sector to watch out are areas indexed to external demand and global pricing. For instance, paper-boards in our case — in the last quarter (Q4 FY23), too, there was pressure,” Puri added.