The India growth story took a knock in 2013 as growth slumped amid rising inflation, leading to a distinct cooling in the enthusiasm of overseas investors. Even the rural markets, which have picked up the slack when urban consumption slowed, have felt the pinch. Thomas Puliyel, president of market researcher IMRB International, spoke to Shambhavi Anand about the year gone by and why a turnaround doesn’t look imminent. Edited excerpts: What is the outlook for consumption, retail this year? FMCG will struggle for some more time. And it will take some more time before we understand when it will start looking up. The steep inflation has affected it badly and recovery will take some more time. The service and manufacturing sectors will take little bit of time before they start growing again. For these sectors to keep growing, there has to be fresh investment which is lacking currently and also in times to come. Has the consumption story broken down in recent months? The last year (2013) was disastrous. In the retail industry, major investments were pulled out. And there are hardly any fresh investments lined up, especially from the foreign direct investment (FDI) point of view. Sectors such as FMCG (fastmovng consumer goods) and retail have also slowed down on account of price inflation. So the sentiments are low, both in terms of investments and consumer sentiments. It will take some time for growth to come back. Even 2014 might be slow. Does that mean India is the worst affected in the Asia-Pacific region? Our direct neighbours are also affected by some or other uncertainties. Sri Lanka has its economic problems, Pakistan has political uncertainties and Bangladesh has its own issues. China still seems to be growing but we will have to wait and watch. So India is not the only country in Asia to not grow. Has the slowdown hit the rural Indian market as well? Historically, rural India has done very well. The employment guarantee scheme, minimum procurement prices, effective marketing distribution services have ensured growth in the rural India. But of late, growth there has been a slowdown. This is primarily on account of inflation. Our estimates say consumption growth in rural markets slowed to 4% between January and September 2013 from 7% in the year-ago period. How has the advertising industry performed? What are its prospects for 2014? What are the prospects for digital advertising in the coming year? Advertising will most probably look up and grow at around 8-10% in 2014, which is twice the level at which it grew last year. Last year, advertising grew at the rate of 4% to 5%. This (year’s growth) will mostly be on account of the money being spent due to elections and political advertising. Digital advertising will grow. Although it has started from a small base, growth on that front is sure. However, TV will remain as important as it is today. Digital will become important on account of the urban population which has embraced digital media well. Even outside metros and the big cities, the internet is being accessed massively through phones. More people in India use internet on phones rather than laptops and desktops. If tablets catch up, digital advertising will catch up even faster. Sectors such as financial products, banks and those meant for youth have used it and will continue to use it. They keep driving growth on this front. Digital will surely play a larger role but TV will remain to be important and dominant. Which sectors promise growth in the new year? E-commerce is one of the areas we should look out for. It has changed the whole retail environment rapidly and has redefined the way people buy products. For booking tickets, one had to go to travel agents first. Now they have been almost removed from the process. A variety of products are available through a variety of ecommerce sites, even to the buyers in smaller towns and cities. These people had no access to these products earlier. Innovations such as delivery in one day will help this industry grow. Players in this area might not be making money at present but innovations will drive growth and eventually things will turn around.