Parle Products, India’s largest biscuit makers with major brands such as Parle-G, Marie and Monaco, is likely to sack up to 10,000 employees, latest media reports said on Wednesday. Amid growing tensions over the slowdown in the Indian economy, the development is bound give more headache to industry captains. Founded in 1929, Parle Products employs around 1 lakh people. Parle has 125 manufacturing units as well as 10 company-owned facilities. Parle’s top executive Mayank Shah reportedly said that the company is facing trouble over the hiked GST on biscuit priced below Rs 100 kg or below. Such products are sold in packs of Rs 5 in retail market.
“The situation is so bad, that if the government doesn’t intervene immediately … we may be forced to eliminate these positions,” Shah was quoted as saying by The Indian Express. Giving out the details, Shah told the Economic Times that, “"We have multiple biscuit brands that are aimed at mid- and low-income consumers which form the core consumer base of a category such as ours, and we are hoping the GST increase will be rolled back if the government wants to revive demand."
Earlier, biscuits priced at Rs 100 kg or below attracted a GST of 12%. But after revision, all biscuits are now being taxed at 18% GST. This has forced the companies to increase the prices of the product, which may have hampered the demand in the market.
Parle Products is not the only company that has voiced its concerns over the slowdown blues. Britannia MD Varun Berry had also said that there is some serious issue with the economy as people are now thinking twice while buying Rs 5 biscuit pack.
India’s auto sector is also facing the worst slump in decades. Nearly 3,50,000 people have lost their jobs since April as India’s auto sector faces worst ever slump, forcing companies to shut down their factories and axe shifts, according to a report published in Reuters. The report, citing industry sources, slumping sales of cars and motorcycles have forced automakers, parts manufacturers and dealers to laid off these workers.
While car and motorcycle owners handed pink slips to at least 15,000 employees, component manufacturers laid off 100,000 employees. The remaining jobs were lost at dealers end with many of them closing their agencies.