With a disposable income of individuals set to increase due to certain tax measures and assured income support for small and marginal farmers, the demand for consumer staples and durables is set to go up.
FMCG and consumer durables majors such as Nestle India, Dabur India, ITC, Marico, Godrej Consumer Products, Panasonic and Whirlpool, all said consumer spending will increase as a result of the measures announced in the Budget.
Higher rural income will aid demand for packaged food items such as biscuits and other bakery products. The demand for alcoholic beverages will also rise in FY20.
Dabur India CEO Sunil Duggal said the biggest beneficiary of the Budget is the middle class and common man. “I am confident this. The budget would boost overall consumer confidence and play a catalyst for demand generation for branded consumer staples and consumer products,” he said.
ITC managing director Sanjiv Puri echoed the sentiment. “The 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, unorganized sector workers as well as the middle class,” Puri said.
Proposals to increase the income of farmers are expected to reduce agrarian stress and more money in their hands is likely to be utilized to buy aspirational consumer products for better hygiene and lifestyle, according to Vivek Gambhir, managing director, Godrej Consumer Products.
According to Whirlpool India’s managing director Sunil D’Souza, the increase in spending power of consumers along with a reduction in goods and services tax (GST) from 28% to 18% on appliances over the last year will prove to be a catalyst for the sector.
In addition, the push towards other infrastructural development will also have a trickle-down effect on the consumer appliance segment. According to Kamal Nandi, president of CEAMA, a consumer electronics industry body, the thrust on rural electrification — which aims to touch every household by March 2019 — coupled with infrastructural push via Gram Sadak Yojana and the rural support schemes will serve as a catalyst in improving demand for consumer electronics and appliances in rural India.―Financial Express