Poll expenditure to have positive impact on economy: Industry leaders
Experts have estimated an expenditure of Rs1.35L crore in the ongoing elections, some of them believe that election expenditure anticipated over the next two to three months would ignite a notable increase in rural spending
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Hyderabad: Spending on elections in India is often lamented as being wasteful expenditure, but that perception seems to be changing. Industry leaders expect the ongoing general polls will have a positive impact on the economy, especially in the countryside, says a report.
“The considerable election expenditure anticipated over the next two to three months would ignite a notable increase in rural spending. Propelled by optimism and economic activity stemming from political campaigns, this surge in rural demand will be fortified,” Keshav Bhajanka, executive director of India's top plyboard maker, Century Plyboard, told.
His company, he added, aims to leverage this opportunity by monitoring rural market dynamics and adapting its product offerings and marketing strategies to align with the evolving preferences and needs of rural consumers.
Shreeram Bagla, managing director of snacks major Annapurna Swadisht, said, “We are expecting a steady recovery in demand in the rural and semi-urban markets in the wake of higher spending on election-related expenses. The government seems to be laying a major thrust on boosting the rural economy. This is likely to spur consumption in villages, thereby shoring up the demand for FMCG products.”
Emami Ltd, another FMCG major with considerable rural dependence, also expressed a similar opinion. “We expect the economy to bounce back on multiple counts in the backdrop of the election. First, anticipation of a good monsoon is expected to boost the rural economy. Secondly, with the softening of raw material prices, while companies are gearing up to pass on the benefits to the consumers, they will also invest more in brand building. The combination of these will definitely push the demand for the FMCG sector up,” wholetime director & Vice Chairman Mohan Goenka told.
N Bhaskara Rao, who chairs the Centre for Media Studies, has estimated an expenditure of Rs 1.35 lakh crore in the ongoing elections.
However, Amnish Aggarwal, head of institutional research at Prabhudas Lilladher, said that the correlation between poll expenditure translating into a surge in rural demand is over-hyped.” Grassroots-level workers of political parties were quoted in the report as saying that there has been a high purchase of snacks and beverages and certain FMCG items required for workers. FMCG products are also used as freebies for audiences brought to political rallies, they said.
