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The Centre’s move to revise the tax slabs is expected to stimulate middle class spending and revitalise urban demand boosting India’s consumption story, believe consumer goods companies.
Experts said that sectors such as FMCG, white goods as well as retail are expected to see an uptick in demand. Consumer goods sector, especially FMCG, has been coping with sluggish demand due to an urban slowdown for the past few quarters, with the lower and middle end of the middle income households cutting back on spending.
Mohit Malhotra, CEO, Dabur India said, “The substantial tax relief measures will provide essential financial respite to middle-class families, increasing their disposable income and encouraging spending. I am optimistic this will help curb the slowdown in urban consumption and bring it back on the growth track.”
“Softening of income tax rates is set to release nearly ₹1 lakh crore into the hands of consumers, providing a significant boost to the consumer sector. As disposable incomes rise, consumer confidence is expected to improve, further fuelling consumption-driven growth. This positive shift in consumer spending power could act as a catalyst for growth in industries ranging from retail to durable goods,” said Naveen Malpani, Partner and Consumer Industry Leader, Grant Thornton Bharat.
Saugata Gupta, MD & CEO, Marico Ltd said that the budget placed the middle class at its core ensuring inclusive and sustainable growth across sectors. “For middle-class families, strategic focus on targeted tax relief and enhanced social security measures, will uplift household sentiments, boost disposable income and drive consumption. This will provide much-needed financial stability to the masses,” he added.
Echoing a similar sentiment, Susanne Pulverer, CEO and Chief Sustainability Officer, Ikea India, said, “We believe many of the initiatives will help fuel the aspirations of many more people, including lower-income groups. The revision of tax slabs empowers the middle class—the heartbeat of our economy—boosting disposable income and fuelling socio-economic growth.”
Kamal Nandi, Business Head and EVP at Appliances Business of Godrej Enterprises Group said the emphasis on the middle class, amidst inflationary pressures, is expected to boost demand and reinforce growth expectations of the consumer durable industry.
Stating that the retail sector witnessed reduced consumption in the past year, Kumar Rajagopalan, CEO, Retailers Association of India added that revision of tax slabs is expected to lead to better consumption, which will mean better business for retailers.
Anand Ramanathan, Partner & Consumer Industry Leader, Deloitte India pointed out that the budget announcements will help spur both the rural and urban economy by encouraging private consumption. He also said some of the measures announced will help broad base the consumption support beyond the formal sector to more unorganised parts of the economy.
Aasif Malbari, Chief Financial Officer, Godrej Consumer Products Ltd said that the budget lays a strong foundation for a more consumption-driven economy, creating significant growth opportunities for the FMCG industry
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