Top fast moving consumer good firms, including Nestle, ITC and Godrej, said on Monday that rural demand for their products have been slack despite a buoyant economy. They, however, are certain that demand will shoot up after a couple of months.

Nestle India chairman Carlo M Donati said that demand was not high in rural markets despite an overall feel good factor and even as sales of high-value products such as two-wheelers, colour televisions and durables saw a significant growth because consumers had made large commitments already by buying these products on cheap and easy finance.

"As a result a huge part of the income is going in to pay off the credit they have availed and in the process the disposable income for FMCGs have declined," Donati said.

He, however, was hopeful that good monsoons and subsequent good harvests will change this scenario and demand will pick up certainly.

ITC Ltd chairman Yogesh Deveshwar said he too believed that the disposable income for FMCGs in rural markets was not high as demand was not significantly high.

"But signs of a recovery is evident. They will all come back and buy more after the monsoons," he said, adding that ITC is created the e-choupal to enhance the purchasing power of rural buyers.

He said that increased competition from several players had an impact on margins and companies were unable to lower prices to generate additional demand.

The soaps and detergents segment had actually declined in the rural markets last year. But Adi Godrej, chairman of the Godrej Group today said he was expecting a double-digit growth for the segment this year.

"Rains have been good and consumers are expected to have a lot of cash on hand. Aspiration levels are also high. So there is a lot of optimism all around," he said.

RPG Group vice-chairman Sanjeev Goenka, who handles the group's food, personal care and music retail business, said though rural demand was showing signs of a recovery it was extremely important for a manufacturer to innovate.

"How long will you sustain demand on the same Marie biscuit and the same neem soap," he said.

Goenka cited that ITC had been able to generate demand for its Sunfeast biscuits by launching new flavours.