Budget to spur FMCG demand with focus on jobs, infra & agriculture
rural economy, is expected to pick up in the hinterland after Finance Minister Nirmala Sitharaman’s Budget announcements on Tuesday. Executives said rural sops, increased focus on infrastructure and job creation will lead to higher demand in the hinterland, which contributes well over a third to overall sales of fast moving consumer goods.
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FMCG stocks surged in the day with the government’s focus on rural markets, jobs generation, agriculture and the middle class. ITC surged 5% on intraday basis, while Tata Consumer Products and Dabur India went up over 3% each, with the Nifty FMCG index moving up sharply in the day, fuelled by the government's allocation of funds for rural development.
Dabur India chief executive officer Mohit Malhotra said the standout feature of the Union Budget was its focus on speeding up fiscal consolidation with the fiscal deficit being revised down 20 bps from the Interim Budget to 4.9%. “The Budget's push on urban and rural growth will help boost rural consumption and also increase discretionary spending,” he said.
Increased allocation towards education, skilling and employment, and increase in standard deductions from Rs 50,000 to Rs 75,000 and revision of tax rates under the New Tax regime will lead to savings of around Rs 17,500 in net taxes for consumers.
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