Budget 2013 does not lay emphasis on FMCG sector

The year 2013 has seen the slowest economy growth in a decade and with this year the budget has been highly anticipated by FMCG companies as they had high expectations from FM to revive the industry which is said to be in a slumber. Even though the focus on this years budget in FMCG sector has not been announced directly, the overall budget was directed towards increasing the purchasing power of rural India. 

Says Sunil Duggal's CEO Dabur India Ltd, "Mr. P Chidambaram's Union Budget for 2013-14 has been largely uneventful and is not expected to do much to boost sentiments.” He further adds, "There are some feel-good moves in the form of special schemes for three key sections of the society, i.e. women, youth & poor, in addition to greater thrust on infrastructure and higher spends on food security. "

In similar lines Sunil Duggal adds that empowering the rural people will also give them strong purchasing power, "The decision to extend interest subvention scheme for short-term crop loans, higher allocation for (NREGS) National Rural Employment Guarantee Scheme are big positives which would surely improve the standard of living in rural pockets of our country which would ensure continued rural demand.” 

"Thrust on the rural and infrastructure development in the Union Budget 2013-14 has brought cheers for Agro-based companies like ours. Setting up storage tanks, silos, go-downs in rural sector will certainly boost agriculture sector in India. Higher allocation to agriculture and rural sector will have a ripple down effect on the Indian economy and agro-based companies. All in all, the Finance Minister seems to have achieved a balancing act of fiscal prudence with emphasise on both growth and stability. It is a positive move that government has worked on developing rural infrastructure ,” adds Dinesh Shahra, MD, Ruchi Soya Industries Limited.

According to Sameer Shah, G M - Financial Planning & Investors Relations at Godrej Consumer Products Ltd higher allocation towards NREGA (National Rural Employment Gurantee Act) would increase spending power of consumers.

On the flip side he adds, "Budget was neutral to marginally positive for Consumer Goods Company and no major announcement towards GST (Goods Service Tax) was major disappointment.”

Though the budget was focused on improving the economy, there has been little done for the comman man, as Sunil Duggal points out, "there is very little real relief and cheer for the common man.”

Even as we see that the economy is recovereing from a sluggish growth, the budget seems to focus more on staying neutral by not taking any major steps in retail sector. With an aim to boost the agrarian economy to drive consumption, these measures will have long lasting impression as they involve the rural India.