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Budget 2012: Little hope for FMCG segment

Shamni Pande     March 16, 2012
Typically the fast moving consumer goods segment tends to bank on many indirect measures that boost consumption. Given this, there has been little cheer in the Union Budget 2012-13 . According to  NH Bhansali, CEO - Finance, Strategy and Business Development, Emami , the budget has not delivered anything meaningful at the macro level.

The decision to make GST operational from August 2012 is a boost and if done will be positive. But the irony is that while the Introduction of GST will increase consumption in the FMCG sector.


"However, increasing excise duty and service tax to 10-12 per cent will severely impact manufacturing sectors, increase costs and will be inflationary for consumers," he points out. The industry was also expecting abolition of CST and rationalization of MAT. Even here some others in the industry are not entirely in agreement.

"The hike in personal Income-Tax exemption slab to Rs 2 lakh was much below expectations," says Sunil Duggal, CEO, Dabur India . Given the continued Inflation, "there is very little real relief and cheer for the common man, and this may directly impact the lifestyles and consumption patterns of the middle class," he feels.

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