It gives me great pleasure to share with you an update on the overall performance of your Company in 2016-17. Brand, talent and culture remain our key assets to deliver sustainable business and earnings growth, thereby creating long-term value for our shareholders. The year under review had a decent volume and profit growth given the macro-environment headwinds. We were able to achieve this as a result of an effective category choice making framework and the strategic building blocks we have put in place - strengthening the core, creating the portfolio of the future, managing costs, and investing in people and process capability ahead of the growth curve. I believe, these will continue to hold us in good stead in the long run.
I strongly feel that focus will lead to depth, and depth will lead to excellence. Mr. Saugata Gupta, Managing Director (MD) & CEO of your Company, continues to run the day-to-day operations of the Company, and steer it towards its medium-term aspiration of becoming a significant emerging markets multinational company. I continue to act as the Non-Executive Chairman of the Board, mentoring and advising the MD for your Company's strategy and future road map, ensuring highest levels of corporate governance at all times. I also lead the efforts to improve the collective functioning of the Board and am actively involved in the Company's Corporate Social Responsibility (CSR) initiatives.
It was yet another difficult year for the global economy, characterised by subdued growth and geopolitical uncertainties. Financial Year (FY) 2016-17 was an eventful one- with Brexit, Donald Trump's victory in the US Presidential Elections, demonetisation of the Indian currency, and results of the largest state elections in the country. The biggest international risks to the Indian economy include crude oil prices, traderelated tensions between major economies, and growing protectionism. Even as the world experiences economic turbulence and slowdown, contributing to a general lack of cheer as far as economic growth goes, India continues to deliver a standout performance and grow at a rapid pace. India has continued to perform amidst global turmoil and delivered 7.1% GDP growth for FY 2016-17.
In India, rural demand continued to be sluggish in the early part of the year, on the back of two consecutive poor monsoons. The overall market showed signs of recovery in the latter half of the year, but faced a temporary slowdown in November due to demonetisation. Nonetheless, India's economy is in the midst of a recovery with lower fiscal and current account deficit, lower inflation, and benign commodity prices. The government's initiatives like 'Make in India', "Digital India" and "Startup India" will strengthen India's position on the world map. I believe that India is a standout among emerging markets, and the country's growth seems poised to return to a high-growth path.
Goods and Services Tax (GST) is one of the biggest indirect tax reforms which India has ever witnessed. I strongly believe that GST is a progressive step which will transform the fiscal architecture of modern India with regard to matters of taxation, and enhance the overall business environment. Due to elimination of cascading impact of taxes, it will benefit the end consumers in the form of lower prices of products. It will provide an upward push to consumption, which augurs well for consumer goods companies. It will also lead to supply chain efficiencies, which will further unlock value for the companies. The enactment of the GST legislation has been a milestone reform that will create a win-win environment for all stakeholders with an integrated and productive economy, and is expected to further boost economic growth. However, there could be temporary transition challenges during the cut-over.
Goods and Services Tax (GST) is one of the biggest indirect tax reforms which India has ever witnessed. I strongly believe that GST is a progressive step which will transform the fiscal architecture of modern India with regard to matters of taxation and enhance the overall business environment. Due to elimination of cascading impact of taxes, it will benefit the end consumers in the form of lower prices of products. It will provide an upward push to consumption, which augurs well for consumer goods companies.
Going beyond economic returns, your Company believes that it is geared to build purpose-driven brands that offer a win-win for the Company and society at large. Brands and businesses are important constituents of modern society. It is their responsibility to be good citizens of this society. Brands with a purpose can help build a strong connect with the consumer and create a sustainable business while contributing to society. With this balance between purpose and consumer equity in its brands, the Company ensures that sustainability is coded at the centre of its core business.
During the year, your Company remained committed to this purpose with various initiatives. Nihar Shanti Amla supports the cause of education of underprivileged children across India. Saffolalife, a not-for-profit initiative of Saffola, has been on a mission to make people realise the need and importance of heart health. Through these various campaigns, Marico's brands have touched the lives of many Indians, and built meaningful relationships that go beyond the transactional nature.
As an FMCG company, your Company puts a lot of thrust on innovation and believes that innovation will help accelerate its growth. With this mission, Marico Innovation Foundation (MIF) a not-for-profit wholly owned subsidiary of your Company works towards fuelling the innovation journey in the country. MIF works with various social enterprises through the Social Innovation Acceleration Program (SIAP), with the objective of providing them with customised capacity building support. MIF also leverages student teams from leading management institutes to help these social organisations with research (primary and secondary) and critical inputs on their businesses. The Directors' Report carries a detailed update on these initiatives.
Your Company's efforts to achieve and sustain highest standards of corporate governance were duly recognised during the year. Your Company was recognised in Forbes India's Super 50 companies 2016.
Our vision for the future is to continue to strive hard to fulfil Marico's potential, and contribute to India's economic & social growth story as an emerging market MNC. We will continue to work with our stakeholders to propel strong yet sustainable growth. I firmly believe that the "Business of Business is beyond Business", and therefore I would like to re-affirm our commitment to innovation and purpose-driven growth which maximises the potential of all stakeholders.
Finally, I would like to thank your Company's employees, whom we call 'members', and all other stakeholders for their consistent commitment, engagement and encouragement in our journey. I would also express my gratitude for your ongoing trust and support, and on behalf of the entire Marico team across the world, I thank you for accompanying us on the exciting journey ahead. We will continuously seek and strive to do good, act better, and do what is best for us and society at large.
With warm regards,