Impact of the Union Budget 2014-15 on the FMCG sector

Mr. Ullas Kamath, Joint Managing Director of Jyothy Laboratories

The Budget 2015-16 is a sincere effort to address all class of society and bringing the economy back on track. More money in the hands of rural India by way of social sector schemes like farm credit, rural infrastructure funds allocation, MNREGA allocation and increasing agricultural area and productivity fares well for the FMCG sector as it will revive rural demand for consumer goods.

The industry is braced well to gain maximum mileage from the Swachh Bharat campaign, as it not only about creating sanitation but overall awareness towards personal hygiene and health. This pan-India campaign will enable Indian consumers to be more conscious of using products for hygiene purpose.

On the tax front, reducing Corporate tax from 30 percent to 25 percent in a phased manner over next four years, while certainty on GST being implemented by April 2016 will provide a much needed boost to India Inc.

Keeping inclusive development in mind, the Finance Minister has rightly emphasized on job creation and making India self-sufficient in employment and manufacturing. From a common man's perspective, duties on day-to-day items have been kept unchanged with a conscious attempt to keep inflation under check.

All in all, a forward looking Budget, we are hopeful that 8-8.5% GDP growth in 2016-17 should follow suit and consumption volumes to improve from here on.

Source : Equity Bulls

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