Consumer products, FMCG and retail industry expect measures such as income tax slab revisions to boost consumption, enabling them to garner a bigger share of consumer wallets.
Rajat Wahi, Partner, Deloitte India, said that consumers are expected to move to the new tax regime and take advantage of it. “This will aid some level of consumption revival and enable consumers to spend on retail, consumer products and travel,” he added
Consumer durables companies are betting big on higher disposable incomes to boost sales in the mass-segment. Kamal Nandi, Business Head and Executive Vice-President, Godrej Appliances, “The revised tax structure is expected to increase discretionary spends on appliances. We can definitely expect boost in demand for products in the high-volume mass segment, which has so far been below pre-Covid levels.”
Deepak Bansal, Vice-President, Home Appliances & AC, LG India, expects a boost in penetration of consumer durables industry. “In the consumer durable industry, premium segment was driving major growth so far and there were concerns about volume growth at the entry-level segment. Reduction in tax slabs will certainly create more disposable income and we will see good traction in overall volume business, especially in entry and mid-level products while upgradation to premium products will continue,” he added.
The FMCG sector, which has been battling challenges of muted rural demand, is also hoping to witness an uptick in demand from the lower middle income and rural households.
Mohit Malhotra, CEO, Dabur India, said, “The government’s decision to reduce tax slabs and increase exemption limits will be highly beneficial for the FMCG sector that has been witnessing downtrading by consumers in recent months. Putting more money in the hands of the consumers, particularly the middle class, really helps as it will improve sentiments and drive consumption.” He added that 33 per cent increase in overall capex outlay for infrastructure development and greater focus on agri sector will generate employment in rural regions which, in turn, will drive growth of branded consumer products.
“The Budget, after an interval, has provided a boost to the middle class and rural incomes. Given the fastest growing economy in the world, and the consumption power of the middle class, this Budget has propelled the vision of making India a manufacturing hub as well as a consumption economy. The revised tax slabs will enable improved savings and disposable income for households, who have come out of a K shaped recovery post pandemic,” said Angshuman Bhattacharya, National Leader, Consumer Products and Retail Sector, EY.