Interim Budget 2024-25: FMCG companies laud Centre's economic nudge

Expect employment opportunities to drive consumption

Fast-moving consumer goods (FMCG) companies are celebrating the Interim Budget announcements, which the industry believes signify a long-term push for the economy. This, in turn, is expected to boost consumption and foster inclusive growth.

Consumer companies are optimistic about the capital expenditure (capex) allocation towards infrastructure, seeing it as a means to generate long-term employment opportunities and drive economic growth.

Mohit Malhotra, chief executive officer (CEO) at Dabur India, said, “While not immediately pandering to populist impulses, the Interim Budget allocates significantly to infrastructure development and provides incentives for rural housing, agriculture, and fisheries.”

Malhotra added that the extension of health care coverage under Ayushman Bharat to Accredited Social Health Activist (ASHA) and anganwadi workers, along with the expansion of the ‘Lakhpati Didi’ scheme’s target to 30 million women, are big positives this year.

 

Angshu Mallick, managing director (MD) and CEO at Adani Wilmar, also expressed that the government’s Interim Budget proposal creates a pathway for inclusive and sustainable growth for India.

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“Overall, it lays the foundation for inclusive growth that will lead to ‘Sabka Vishwas’. The next five years hold the promise of unprecedented development towards realising the dream of Developed India@2047,” Mallick said.

Sanjiv Puri, chairman and MD of ITC, praised the proposal to increase public expenditure, emphasising that, together with astute fiscal prudence and stability in taxes, inflation management, and direct benefit transfer, it will lead to better utilisation and targeting of public funds.

On consumption, Puri said, “The sharp focus on the welfare of farmers, setting up integrated aqua parks, support to dairy farmers, together with the far-sighted schemes for agriculture and rural development, housing, women empowerment, youth, and marginal segments will trigger a virtuous cycle of productivity, incomes, consumption, investment, and livelihoods.”

Roosevelt Dsouza, head of customer success at market research firm NIQ (formerly known as NielsenIQ), highlighted the emphasis on improved living standards through initiatives in housing, education, tourism, and loan schemes. He noted that the substantial increase in capex is poised to enhance existing infrastructure, stimulating production and generating employment opportunities in both urban and rural India.

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“The FMCG industry, particularly in the food sector, received favourable support with strategies to achieve self-sufficiency in oilseeds. This may impact edible oil prices and consumption patterns. Schemes offering free food for rural India and employment opportunities have the potential to increase disposable incomes, thereby boosting expenditures on discretionary products. The Interim Budget aligns with the long-term development vision of ‘Viksit Bharat’ by 2047,” he added.

Akshay D’Souza, chief growth officer at retail intelligence firm Bizom, said that the Budget has remained true to its growth vision from earlier years. “We see the momentum in capex continue along with a focus on increasing creditworthiness through reducing fiscal deficit fuelled by better earnings.”