Industry & Economy
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Budget
More money in consumers’ hands could help FMCGs
Our Bureaus
New Delhi/Mumbai, July 6 While there is nothing specific in this Budget for the fast moving consumer goods (FMCG) sector, the industry reaction is generally positive. Increased spending in the rural sector is expected to increase the purchasing power of the consumers.
Similarly, a removal of the surcharge and a hike in the exemption limits of personal income tax should put more money in the pockets of buyers.
Mr Sunil Alagh, former Chairman, Britannia Industries, says, “On the whole the Budget is great. What is good is that if there is money for the consumer, it will enable him to afford what he was buying earlier. With the farm loan waiver, rural consumers have got the money and the willingness to spend more.”
Dabur’s Vice Chairman, Mr Amit Burman, too, sees the increased spending on farmers as a positive sign. “Extension of the debt waiver scheme in view of the delay in monsoons and the decision to offer loans at a subsidised interest rate of 6 per cent for farmers who pay their dues in time would surely go a long way in giving a further boost to the rural economy and fuel demand,” he said.
This view is endorsed by industry analysts. Said Mr Pinakiranjan Mishra of consultancy Ernst & Young, “The Budget has been fairly good for the FMCG sector because the Government has increased the NREGA outlay which means higher rural incomes and higher purchasing power. Moreover, surcharge on personal income tax has also been removed which means more disposable income for the urban consumer.”
Mr Ramesh Chauhan, Chairman, Bisleri International, said that a lot is missing from the Budget and the stock market is an indicator of it.
Others too, feel the impact is going to be negligible for the common man, especially if inflation continues to rise. As Mr Anupam Dutta, MD, Kelloggs, said, “The delta of tax exemptions is not humungous. If inflation continues there will be no material changes and impact on consumption.”
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