Consumer cos hail budget, say will raise disposable income

Consumer goods companies today termed the Budget 2018 as forward-looking which will fuel the rural and agrarian economy, besides increasing disposable income for the common man and drive demand for mass products.
Unveiling the last full budget before general elections, Finance Minister Arun Jaitley today announced a slew of measures for the agriculture and rural sectors as also a new health insurance scheme for the poor.
In a major bonanza to farmers, Jaitley announced fixing support price of Kharif crops like paddy at least 50 per cent higher than the cost of production, while raising farm credit target for the next fiscal by 10 per cent to Rs 11 lakh crore.

"It presses all the right buttons when it comes to fueling the rural and agrarian economy with a slew of measures including higher MSPs for Kharif crops, upfront agriculture focus, institutional support for price discovery and upgradation of rural haats to give farmers better access to formal mandis," Dabur India CEO Sunil Duggal said.
He further said while there may not be any big-ticket income tax relief for the middle class, the increased standard deduction against travel and medical expenses will add to the disposable income in the pockets of the common man.
Keeping the income tax rates and slabs unchanged, Jaitley introduced a Rs 40,000 Standard Deduction for salaried employees and pensioners in lieu of the present exemption in respect of transport and medical expenses.

"The standard deduction of Rs 40,000 for salaried tax payers will increase disposable income for the middle class and drive demand for mass products," Godrej Consumer Products Ltd (GCPL) Managing Director and CEO Vivek Gambhir said.

However, the need of the hour is to ensure that these initiatives get translated into tangible results through faster implementation and on-ground execution, he added.
Expressing similar views, Marico MD & CEO Saugata Gupta said: "It is all-inclusive, forward-looking and has a strong thrust on agriculture, rural, MSME, healthcare, infrastructure and employment, which augurs well for FMCG companies."
With regard to MSMEs, the finance minister lowered the corporate tax rate to 25 per cent for businesses with turnover up to Rs 250 crore.

He also announced a 'National Health Protection scheme' to provide health cover of upto Rs 5 lakh per family per year for second and tertiary care hospitalisation to 10 crore poor and vulnerable family (about 50 crore beneficiaries).
Describing infrastructure as a growth driver of the economy, Jaitley announced ramping up allocation for the sector to Rs 5.97 lakh crore for 2018-19, up by over Rs 1 lakh crore while estimating that India would need Rs 50 lakh crore investments in roads, air, rail and inland waterways.
While a slew of investment was announced mostly catering to the rural economy, the government has let go on the fiscal consolidation roadmap.

As a result, fiscal deficit for current fiscal will be 3.5 per cent of the GDP as against 3.2 per cent previously targeted, and 3.3 per cent in FY'19 as opposed to 3 per cent previously targeted.