FMCG industry welcomes Interim Budget; says it will fuel growth

The fast-moving consumer goods (FMCG) industry has welcomed the budget saying that the measures will help farmers and spur consumer spending among middle-class. Dabur India chief executive officer Sunil Duggal said the budget would boost overall consumer confidence and play a catalyst for demand generation for branded consumer staples and consumer products.

The government's decision to allocate Rs 60,000 crore for MNREGA and another Rs 19,000 for construction of rural roads under Gram Sadak Yojana, coupled with the modest farm support scheme offering income support for marginal farmers tick all the right boxes when it comes to fuelling the rural and agrarian economy, Duggal said. However, the upward revision in fiscal deficit target to 3.4 per cent of GDP for 2018-19 and 2019-20 remains an area of concern, he said.

"The interim budget proposals should augur well for the Indian economy by providing a growth impetus through a boost in consumption as well as an inclusive framework designed to benefit agri and rural communities, unorganised sector workers as well the middle class," ITC managing director Sanjiv Puri said. Marico's managing director and CEO Saugata Gupta said the host of measures to boost the agrarian economy through minimum support price and increased investment in the farmer scheme is a welcome move as it will benefit small and marginal farmers.

"Simplified tax assessment processes coupled with the increase in tax exemption for income up to Rs 5 lakh per annum for individual taxpayers, will not only reduce the tax burden on the middle-class citizens but also increase the taxpayer base in India. It will additionally result in the rise of disposable income in the hands of consumers thereby augmenting consumption," he added. FMCG major Nestle India expect measures announced will further accelerate domestic consumption.

Echoing the views, Godrej Consumer Products managing director and CEO Vivek Gambhir said, "Overall, this is a 'consumption first' budget that will provide a much-needed thrust to growth in the FMCG sector. It re-emphasises the aam aadmi at the heart of the government's pro-growth, pro-reform agenda; maintaining the fiscal deficit, stimulating demand and building a sustainable growth platform."

According to Jyothy Laboratories joint managing director Ullas Kamath, the decision of reducing the tax burden on the salaried individual's will boost the consumer sentiment thereby increase purchasing power. "The balanced efforts taken towards the rural and the urban economy will help in boosting the demand-supply chain of the country," he said.

The retail sector is also likely to benefit due to the budget feels Retailers Association of India CEO Kumar Rajagopalan. "More money in the hands of a middle class, thanks to the increase in basic exemption limit from Rs 2.5 lakh to Rs 5 lakh will be beneficial for retail as it will create a feeling of well-being, which is known to boost consumption," he said. However, toy manufacturer Funskool India's CEO John Baby said the budget does not provide any impetus for the manufacturing sector to create more employment.

(With inputs from agencies.)