The 2009 monsoon has been the most deficient since 1972, India’s Met department has said. Investors have been concerned about the impact on demand for consumer products, especially for consumer non-durables. But the situation on the ground may not be that bad.

They are expected to benefit from the government’s National Rural Employment Guarantee Act Scheme— which guarantees 100 days of work to poor rural households—with wages being hiked by 30%.

Salaried employees will not be affected and government employees will see wages rise because of the pay revisions. As a result, HUL expected rural household incomes to increase and disposable incomes to be high.

Graphics: Ahmed Raza Khan / Mint

Most of the large categories are growing well, with the exception of edible oils, which suffered because of lower prices. Detergents, soaps and skin creams are showing good volume and value growth.

But the impact is not uniform across companies, with some such as Godrej Consumer Products Ltd and Tata Tea Ltd doing quite well, whereas companies such as HUL and Britannia Industries Ltd are growing at much slower rates.

In some companies, volume growth is playing an equal role in healthy and sustainable sales growth whereas in some, rising prices are playing a bigger role. The FMCG Index on the Bombay Stock Exchange is up by 5% over a month ago, reflecting some of this optimism, although the sector has been an underperformer.

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