Union Budget 2024 Expectations for the FMCG sector Mayank Shah, Vice President, Marketing, Parle Products

“We expect the upcoming budget to significantly focus on infrastructure, particularly rural infrastructure, alongside agriculture-related sectors. This emphasis will help revive and accelerate demand in the rural economy, which was impacted last year and is now beginning to recover. Investments in rural infrastructure and agriculture will not only stimulate demand but also generate employment in rural India. Additionally, increased allocation to rural initiatives like NREGA (Mahatma Gandhi National Rural Employment Guarantee Act, 2005) will further support the revival of rural demand.

On the urban front, job creation initiatives are crucial. There is a clear correlation between higher employment and increased consumption of consumer products. Therefore, we anticipate government efforts towards job creation, likely through substantial infrastructure spending, which will generate employment opportunities.

However, putting more money in the hands of consumers is essential. This could be achieved by either lowering tax rates or revisiting and potentially increasing income tax slabs. Such measures would boost disposable income, thereby driving urban demand.

Regarding price hikes, we do not foresee any significant increases in the near term. Most input prices are currently stable, with edible oil prices notably lower than last year, offsetting higher wheat and sugar prices. Crude oil prices are also under control, benefiting packing material and transportation costs. Given these conditions, along with the price corrections that have occurred over the past three quarters, we do not anticipate any major price hikes in the upcoming quarter or the next six months.

We anticipate that the government will continue its current favorable policies towards the FMCG sector. The focus should remain on stimulating consumer demand through the initiatives mentioned. Overall, these expectations reflect our optimism for policies that will support sustained growth and stability in the FMCG sector.” – Mayank Shah, Vice President, Marketing, Parle Products