FMCG sector hopes for a growth-oriented Budget

The Dollar Business Bureau

After having been impacted by demonetisation, the FMCG sector is pinning hopes on a growth-oriented Union Budget to look for a revival in customer confidence and build demand in urban as well as rural markets.

“We are expecting a growth-oriented Budget with various stimuli to revive consumer confidence...proactive reforms to stimulate demand by increasing the money in the hands of the emerging middle class and rural India, this will help bring FMCG growth back on track,” Vivek Gambhir, MD, Godrej Consumer Products Ltd told PTI.

Personal care and cosmetics product company, Emami Ltd, is also expecting a growth-oriented budget that would boost consumption, improve public investment, widen tax base, encourage digitisation and improve business sentiments.

“The Budget should be focussed on clarifying policies especially with respect to GST, POEM, GAAR, etc. As with any other Budget, limiting deficits and providing higher growth is to be a huge challenge,” stated N.H. Bhansali, CFO & CEO Finance Strategy & Business Development, Emami.

“Ease of doing business would be the other area of focus in the present subdued business environment. Infrastructure, agriculture and service sectors are likely to get due support and attention,” he added.

Marico Ltd is also looking for a Budget that would focus on improving agricultural productivity and boosting rural sector along with offering benefits to the salaried class in order to improve disposable income in the urban areas, which would encourage consumption.

FMCG companies such as Jyothy Laboratories and HUL, which have declared their October-December quarter results, have accepted that their sales were hit due to adverse liquidity situations in the market due to demonetisation.

Cholayil Group, producer of Medimix ayurvedic soap, is expecting incentives in tax for FMCG goods, which are based on traditional Ayurveda.