With barely a week left for the Budget, the fast-moving consumer goods and appliances industry have high hopes pinned on it. The Budget will most likely be an interim one, considering that it would center around the common man’s needs, consumers, consumption and measures including rekindling of investments ahead of the general elections.
“It is very obvious for an FMCG player like us — the Budget needs to mean higher purchasing power for the consumers. Also, a reduction in income tax slabs will bolster the FMCG sector. The rural FMCG sector is also expected to witness a boost due to increased government spending. More money in consumer’s pockets reinforces the FMCG sector,” said Sahil Gilani, director (sales and marketing), Gits Foods.
Industry players also highlighted that there is still some stress in the rural market. “The very fact that the governments in many states had to waive off farm loans is certainly indicative of the stress in the rural markets. Wage rates have also not moved up. We believe rural boost to drive growth,” said Sanjiv Mehta, chairman and managing director, Hindustan Unilever Ltd, adding, “Directionally, I would believe that in some tranches, the corporate tax rate should move towards 25 percent.”
On the other hand, the Consumer Electronics and Appliances Manufacturers Association (CEAMA) has pitched for a balanced combination of reforms and regulations such as raising customs duties on imported finished goods while lowering the same on components in order to promote domestic manufacturing.
Ahead of the interim Budget, CEAMA has suggested increasing the basic customs duty on import of finished goods such as TVs, ACs, refrigerators and washing machines. CEAMA also called for a reduction in basic customs duty on critical components such as compressors, open cell and display panel used by the industry to 5 percent from the existing 10 percent, to boost domestic manufacturing. It has also asked for subsidies on locally manufactured products, which “will act as a stimulus” for the development of the components manufacturing base and boost ‘make-in-India’ initiatives.―New Indian Express