Budget 2024: FMCG majors expect measures for demand recovery, lower inflations

After suffering from subdued demand and high inflation for nearly three years, the country’s fast-moving consumer goods majors are demanding measures from the Finance Minister to tame inflation and improve demand for daily essentials. 

According to Angshu Mallick, Managing Director and CEO of edible oil major Adani Wilmar, rural demand has been slower than expected while inflation has hit consumption. “We recognise the vital role rural economies play in India’s economic growth and emphasize the need to introduce measures that would further boost consumption in these areas. New policies are anticipated that safeguard the interests of oilseed farmers and the oleochemical industry while effectively addressing challenges faced by rural communities. This, in turn, will have a positive ripple effect on industries connected with rural landscapes. The thrust on capital expenditure would be welcomed, as it not only spurs economic growth but also ensures inclusive development,” he says.

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Aasif Malbari, Chief Financial Officer, Godrej Consumer Products Limited is expecting the interim budget to navigate the immediate challenges faced by sections of the economy while fostering a vision for longer sustained economic growth. “To support a more inclusive economic growth the government could consider proactive measures aimed at future controlling inflation and stimulating consumption in the larger economy. A consumption boost will lead to a cycle of sustained economic growth in the long run. Furthermore, attention should be directed towards enhancing rural job creation and consumption, enhancing incentives for capital expenditure, and incentivising innovation and research and development (R&D). Aligned with the aspirations of India@100, the budget should also allocate larger resources for supporting exports and greater job creation in both rural and urban markets. This would boost local production and cultivate a resilient and inclusive economy,” he says.

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Mallick says, with the higher expectation of the Rabi crop harvest, he anticipates rural demand to pick up. “A level playing field for manufacturers could be achieved by categorising imports like palm oil, stearic acid, soap noodles, oleic acid, and refined glycerin under the restricted-items list or implementing a 25% import duty on finished products as opposed to raw materials. Additionally, the suggestion is to grant duty-free import privileges for raw materials to entities equipped with processing facilities. This move is expected to stimulate innovation and boost competitiveness, thus promoting the Make in India movement.”

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Manish Aggarwal, Director, Bikano (Bikanervala Foods Pvt Ltd), says that he is eagerly anticipating the government's focus on agriculture in the upcoming budget. “This holds significance for the growth of rural areas, the potential for increased income in rural areas, and overall business expansion. The possibility of additional funding for the Agriculture Accelerator Fund aligns with our goal of utilising new technology to improve farming practices, particularly enhancing storage facilities. This could contribute to better storage solutions, benefiting farmers and the overall FMCG sector”, he says, adding, Furthermore, we strongly encourage the government to invest adequately in boosting the rural economy. By enhancing the conditions for rural jobs and increasing government spending, we can stimulate greater demand in rural areas.”