How can Budget 2025 make the consumer retail sector get back on its growth trajectory
consumer retail sector is among the largest contributor to GDP growth in India, estimated to be $900Bn in 2022 and expected to reach $2Tn by 2030. In the past few years, India had been the fastest growing large economy with domestic consumption being the key driver. However, the pace of growth has slowed in the past few quarters raising concerns around cyclical slowdown. The latest projection for FY25 GDP growth has been revised to 6.4% by the government, a sharp decline from 8.2% GDP growth last fiscal.
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One of the key factors behind slow growth appears to be sluggishness in urban demand as flagged by most consumer sectors such as FMCG, Consumer Electronics, Home & Household, Lifestyle accessories etc.
While rural consumption has shown resilience owing to factors such as favourable monsoon, government spending on rural development schemes such as MGNREGS, Pradhan Mantri Awaas Yojana-Gramin (PMAY-G), year-on-year growth is yet to bounce back to pre-covid levels. Further, mass market segments have got negatively impacted on account of persistent inflation, uneven tax structure, lower private capital expenditure leading to lower job growth.
Given this, what can be expected from the budget?
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