Budget 2024: FMCG companies expect increased spending on rural India will fasten recovery

Companies operating in the FMCG space expect the government's move to incentivise rural India and schemes like 'Lakhpati Didi' helping women would spur the recovery of demand in those regions.

Industry captains also hailed the 11% rise in capital expenditure, reaching 11 lakh crore in the interim budget presented by Finance Minister Nirmala Sitharaman in the Parliament on Thursday, saying it will add to job creation and economic stimulation.

Moreover, the budget also creates opportunities for the FMCG sector to enhance infrastructure and improve distribution, facilitating a more extensive reach into the rural market. The sector is strategically poised to leverage the industry's potential, aiming to significantly strengthen the market share in these crucial areas, said Parle Products VP Mayank Shah.

ITC Chairman Sanjiv Puri said the interim budget has many positives and has a lot of stuff for rural India, which will boost demand.

"At the end of the day, there are lots of interventions on the agri side. There is stuff for aquaculture, dairy, oilseeds, for using the input costs. Plenty of things to look forward to as far as rural is concerned," Puri told PTI.

Dabur India CEO Mohit Malhotra said the budget allocates significantly to infrastructure development and provides incentives for rural housing, agriculture, and fisheries.

"The extension of healthcare coverage under Ayushman Bharat to ASHA and Anganwadi workers, and expansion of the 'Lakhpati Didi' scheme's target to 3 crore women are big positives this year, and will go a long way in empowering rural women and enhancing the quality of life in rural India, thereby ensuring sustained demand for branded consumer goods," he said.

The FMCG sector has been struggling for growth in rural India for the last several quarters.

Marico MD and CEO Saugata Gupta said the budget is quite bold in its aspirations and inclusive in its approach.

"Interim budget's focus on fiscal prudence, targeting a commendable fiscal deficit of 5.1% of GDP for FY25, is noteworthy," he said.

IKEA India CEO Susanne Pulverer said the focus on manufacturing, youth, skilling and women empowerment in the interim budget is truly commendable and will pave the way for more inclusive growth and economy.

"The emphasis on making energy security and infrastructure for green mobility accessible and affordable for the many people resonates with IKEA's sustainability vision. We believe that the government has only furthered the country's resolve for a Viksit Bharat," she added.

According to Godrej Consumer Products (GCPL) CFO Aasif Malbari, the budget's focus on enhancing connectivity and infrastructure bodes well for India Inc, including the FMCG sector.

"Moreover, the emphasis on upskilling and the significant rise in women in the workforce signify a holistic approach to fostering an inclusive and dynamic economy, setting an optimistic tone for the years ahead," he said.

Mars Wrigley India CFO Meghal Sheth said the interim budget focuses on agriculture, capex, and tax reforms. It promises an increased disposable income for consumers in the short term, and sustained growth in the long run.

"We are confident that the government's ambitious drive to boost domestically produced goods will not only fortify manufacturing capabilities but also fuel job creation, contributing to the holistic development of the economy," he said.

Adani Wilmar MD and CEO Angshu Mallick said the widespread adoption of Nano-DAP across all farming regions is a commendable innovation, empowering farmers and aligning our practices with environmental harmony, reflecting a conscientious approach within the FMCG sector.

"Moreover, the launch of the 'Atmanirbhar Oilseeds Abhiyaan' marks a pivotal step towards achieving self-sufficiency in oilseed production, showcasing our commitment to advancing self-reliance and sustainable practices within the FMCG landscape," he said.

Bikanervala Foods Director Manish Aggarwal said additional support for domestic manufacturing, particularly incentives for local production of raw materials and packaging through schemes like PLI for the food processing industry, could have further bolstered the FMCG sector.

Anand Ramanathan, Partner and Consumer, Products and Retail sector Leader, Deloitte India, said the budget continues to support growth and productivity in agriculture "Also, from a protein standpoint -- boosting dairy productivity and supporting sea food exports are some of the big areas of focus. These announcements will provide employment opportunities for the rural economy," he said.

Modi Enterprises Managing Director Samir K Modi said the interim budget focuses on creating opportunities for Indians, especially the youth and women, thereby providing a robust impetus to the nation's growth.

Info@BestMediaInfo.com