The decline in auto sales in India has entered its third quarter and the macro indicators continue to remain weak. The question on everyone's mind is whether discretionary consumption is going to be in a longer term slowdown.

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Speaking to CNBC-TV18, Sunil Duggal, former CEO of Dabur, and Abneesh Roy, senior vice-president at Edelweiss Securities, shared their views on current consumer sentiments.

According to Duggal, the slowdown was coming for the last few quarters. “Fiscal 18-19 had a correspondingly lower base of FY17-18. So the numbers looked optically good particularly in the first half but the slowdown was evident towards the latter part of the last fiscal and it is continuing into this. Moreover, Lok Sabha elections have had no impact on demand unlike earlier,” he added.

Duggal expects the second half to be better. "Whether it will be marginally better or substantially is very hard to say. However, I am pretty hopeful that the demand would stage some kind of revival. The consumption story in the staple space is intact and we should not worry too much. There would be some revival. It might take a bit longer than what we like,” he observed.

Sharing his expectations on the Union budget, Duggal said: “There could be some lowering of GST rates. The 28 percent slab is not required at this point in time. Some of the 18 percent categories can be moved into 12 percent. That could be an effective step to revive demand without hurting revenues as the extra demand would compensate for the loss of revenues in terms of the rate cuts.”

“The fiscal space is something which I am not familiar with, but certainly revival of sectors such as real estate is critically important in terms of job creation. I do not think the agrarian sector is going to fuel consumption and growth to the extent it did over the last 10-20 years. So it got to be infrastructure, roads, railway, real estate and most importantly, autos which would ultimately lead to demand revival. So the economy has to be looked at holistically in terms of overall management rather than just a particular sector like FMCG,” Duggal further noted.

Roy is also expecting most of the slowdown in the first half. “The monsoon has been delayed but what really matters for rural areas will be what the central and the state governments do,” he pointed out.

Speaking about stocks, he said, “I would expect Pidilite to do close to double-digit volume growth in FY20. Yes, a lot of that will be more towards second half. So we remain quite positive on Pidilite because waterproofing and a lot of the other growth drivers will be definitely making Pidilite grow close to double digit in terms of volumes.”

He thinks the government should step in to resolve the liquidity crunch. “One key reason is liquidity crisis which is impacting the distributors across the board. The interest rate cut has happened but liquidity crisis is engulfing most of the sectors, the entire economy.”

“An important thing is compliance in terms of GST. If the compliance can be taken to the next level in terms of invoice bill, it will be a big positive. The market share of organised companies can improve and tax collection also can go up for the government, which can be brought back in terms of stimulus and development,” added Roy.