Finance Minister Nirmala Sitharaman through Budget 2022, has set the tone for a long-term vision, with many elements of capability building including infrastructure, self-sufficiency, manufacturing competitiveness, digitisation, telecom infrastructure, financial inclusion and human resource capacity building.
The budget has been different from previous ones in its amplification of aspects that could propel India into a responsible economic superpower over the next decade.
The emphasis on energy efficiency, renewable solutions, solar power announces a clear leadership position that India is trying to build amongst the global community.
The acknowledgement of the role of start-ups, private equity investments and private sector investments along with the need for public spending to measure up step for step in this journey is a great step towards holistic capability building.
With an estimated GDP growth of over 9%, the FM seems to be satisfied with the short-term performance of the economy. Consumer goods companies could expect an increase in consumption over the short to medium term driven by the thrust on employment and financial inclusion.
This should reflect an uptick in rural consumption, which has been a challenge for the industry.
Rationalisation of import duties as part of the "Make in India" initiative, is also likely to give a strong impetus to consumption bringing sustainable growth for consumer, e-commerce and retail sectors.
Digital push under "Amrut Kaal" vision, is in line with the e-commerce-led consumption growth being witnessed in India. For the retail sector, reeling under the pandemic, the budget, unfortunately, has very little direct support to offer.
In the immediate term, as the country has been battling with direct and indirect disruptions of the pandemic, the direct and short-term benefits with respect to "putting more money in consumer wallets" or special subsidies or support to industry, in general, seem to have got lesser emphasis.
Overall, the budget is modern and futuristic but a few initiatives to spur short term consumption would have uplifted the sentiment and benefit the consumer and retail sector.
(The author is Partner & National Leader- Consumer Products & Retail sector, EY India.)
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