Consumer goods, realty firms see boost in biz

While government employees are excited with the approval of the Seventh Pay Commission recommendations by the Cabinet on Wednesday, consumer goods companies and real estate firms expect that higher spending will set their cash registers ringing.

With more disposable incomes now in the hands of government employees and defence services personnel demand will increase, especially for premium and aspirational products, consumer durable firms said.

Higher disposable income will boost demand for the consumer durables industry, said Kamal Nandi, Business Head and EVP, Godrej Appliances. “This will help create a robust demand for durables, especially during the upcoming festival season. We believe the demand could be high for premium and new-age technology products,” Nandi added.

This could mean boost for products such as split air-conditioners and frost-free refrigerators, firms said.

Niladri Datta- Corporate Marketing Head at LG India, said consumers are expected to upgrade durables and this will have an impact both on urban and rural sales.

Consumer goods makers have already started focusing on ramping up distribution and channelising their businesses to be able to make the most of this demand.

Ajay Seth, Head, Sales and Service, Panasonic India, said, “Consumer durables such as ACs and refrigerators which were considered luxuries in the past, have become items of necessity. The rise in disposable income and scaling of e-commerce, the consumer durables industry is expected to grow by 15 per cent in this fiscal.”

Real estate players believe the hike in salaries in the public sector could have a ripple effect on the private sector. Vineet Relia, Managing Director, SARE Homes, said, “The revised slabs would help flush in more liquidity in the market by broadening the channel of purchasing capacity of nearly one crore employees in India. The raise would definitely have a ripple effect on the private sector too.”

Amit Modi, Director, ABA Corp, added that while opening of FDI norms will help ease the way for supply in real estate, the pay hike to government employees could spur demand for housing.

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