NREGS allocation hike would boost buying

04 Mar,2013

By A Correspondent


A hike in allocation for the National Rural Employment Guarantee Scheme and reliefs offered to a section of taxpayers would put more money in the hands of the consumer. This, in turn, would provide the much needed boost to the fast moving consumer goods (FMCG) industry, which is currently witnessing a slight slowdown in volume growth.


More money in rural pockets and an improvement in the standard of living would help in escalating product penetration and improving per capita consumption. Even a small rise in the disposable incomes of India’s 350-million-strong middle income consumers will bolster growth. These middle income consumers form a vast majority and contribute 40-45 % to the revenues of the roughly Rs 1,70,000-crore FMCG sector.


“I’m happy that excise duties and import duties remain unchanged. No price increases are expected,” said Rakshit Hargave, MD, Nivea India.


However, given the fact that this year’s Budget comes against the backdrop of the slowest economic growth in a decade, experts believe the finance minister may have missed the opportunity to give that much-needed booster dose for growth.


“While steps like Rs 2,000 relief to taxpayers in the Rs 2-5 lakh bracket and Rs 1 lakh additional relief on home loans of up to Rs 25 lakh would certainly put more disposable income – howsoever little – in the pockets of the common man, but these were much below expectations. Given the continued inflation, there is very little real relief and cheer for the common man,” said Dabur India CEO Sunil Duggal.


Source:The Economic Times

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