The FMCG industry on Monday said a special focus on the agriculture sector in the Union Budget will help increase rural consumption and sustain growth momentum.
FMCG manufacturers -- like ITC, Emami, Marico and Jyothy Labs -- said it is encouraging capital infusion in infrastructure, divestment and restructuring of allocations without impacting consumers negatively.
The industry also said the Budget will drive consumption and growth momentum needed to revive the economy.
According to ITC Chairman & Managing Director Sanjiv Puri, it is a "visionary and growth-oriented budget", which provides further impetus to build India's competitiveness as also foster inclusive growth. The enhanced capital expenditure, particularly on infrastructure, will create livelihoods and provide an accelerated thrust to the V-shaped recovery trajectory.
"The heightened spends on agriculture and rural infrastructure development are aligned to the comprehensive policy interventions aimed at creating competitive agri value chains to raise farm incomes. These augur well for the economy and will spur a virtuous consumption-investment-employment cycle," said Puri.
According to Emami Director Harsha V Agarwal, there are significant allocations for infrastructure building, especially for rural India.
"The budget enhances allocation to agri-credit and also prioritises the agricultural and agri-allied sectors. All these measures are expected in generating an increase in rural consumption which is necessary for reviving the Indian economy," he said.
While Marico MD and CEO Saugata Gupta said the Budget has inclusive development plans for the agricultural sector and should help in sustaining the momentum of rural growth.
"Overall, this Union Budget ticks most of the right boxes with an encouraging capital infusion in infrastructure and funding the same through prudent borrowing, divestment and restructuring of allocations without impacting consumers negatively. I believe that going forward, this will bode well for generating demand, driving consumption and sustaining the growth momentum needed to revive the economy," he said.
Rural India contributes around 36 to 37 per cent of the total FMCG sales, the bulk of which is contributed by food items, data analytic firm Nielsen had said earlier.
Though small in numbers, the rural sector has helped the FMCG industry amid the pandemic, as markets in those areas were lesser impacted.
Jyothy Labs Joint Managing Director Ullas Kamath said the balanced fiscal deficit at 9.5 per cent reassures the economic growth of the country.
"The best outcome of the Budget is that the government has been very focused and has diligently evaluated and assigned specifics to definite categories covering the overarching theme of the country's development. In totality, it is a very promising and realistic budget," he said.
Mars Wrigley India General Manager Kalpesh Parmar said this is a growth-oriented Budget that will propel recovery of the Indian economy post-pandemic, with increased capital expenditure and infrastructure spends across roads, rural, and agriculture sectors.
"This is expected to further boost consumption across categories," he said.
Bonn Group of Industries Managing Director Amrinder Singh said the Budget has announced stimulus packages in the form of low-income tax slabs, tax exemption for notified affordable housing for migrant workers and new agri-infra development cess.
"These moves will no doubt promote consumerism but also will boost overall GDP growth. As more finances have been allocated on building roads, housing and new factories, this will also generate income opportunities for our rural consumers and bridge the gap to have last-mile consumption," he said.
Bikano Managing Director Shyam Sunder Aggarwal said the measure taken by the government in the Budget would lead to stable incomes and higher purchasing power, which would, in turn, generate demand for FMCG and food products and services.
METRO Cash and Carry India MD and CEO Arvind Mediratta said: "Overall, the CAPEX and infra led Budget 2021, amidst the pandemic, strikes a balance between enabling stability in the Indian economy and empowering industries to regain their momentum, thus contributing towards a strategic economic revival".
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