Budget to boost rural consumption, augment consumer purchasing power: FMCG industry

The Union Budget will help drive consumption, especially from rural areas, with its special focus on agricultural schemes and rural development, FMCG industry leaders said.

Terming the measures announced in the budget "positive” , HUL CEO and MD Rohit Jawa said investment in infrastructure will have a multi-year effect and help drive consumption.

"The new announcements today, increasing the investment in rural development, investment activities supporting urban poor, the schemes for youth, employment, especially skilling, are quite positive, especially for businesses like ours that serve consumers," said Jawa during an earnings call on Tuesday.

"These investments will have a multi-year effect in driving consumers to spend more in consumption, that, in turn, of course drive the economy for its value," he said adding these are the right set of announcements and the focus of the budget is mass consumption.

Parle Products Vice President Marketing Mayank Shah said initiatives announced in the budget would definitely go a long way in terms of both infrastructure as well as investments in the agri sector - in terms of generating demand.

"We will see very strong demand coming in from rural India, which is reviving," said Shah adding a good monsoon and festival season would also drive the demand further.

Moreover, tax reforms, and housing sector reforms will help increase spending in urban India also.

Terming the budget "progressive and balanced", Emami Vice President & Managing Director Harsha V Agarwal said its focus on multiple sectors, including agriculture, rural development, MSMEs, women, employment and skill development is anticipated to spur economic growth.

"With a clear emphasis on capital spending to generate growth and a strong focus on employment along with some of the tax benefits, we expect consumption to improve," he said.

Marico MD & CEO Saugata Gupta said a substantial increase in capital expenditure allocation to ₹11.11 lakh crore underscores a continued commitment to strengthen the country’s infrastructure, generate long-term employment opportunities, and drive overall economic growth.

"To promote entrepreneurship and innovation, a corpus of ₹1 lakh crore is being established for low or nil-interest-rate loans, encouraging the private sector to amplify research and innovation in emerging sectors. With a notable 50% increase in average real income and moderate inflation, we stand closer to the vision of a developed India by 2047," he said.

According to Godrej Consumer Products Ltd (GCPL) CFO Aasif Malbari, the budget promises holistic growth of India's macroeconomics at the grassroots level.

"Investments in job creation, skill upgradation, and MSME development will support more inclusive economic growth. The special focus on agricultural schemes and rural development will indirectly boost consumption spending, particularly in rural and non-metro markets," he said.

Pidilite MD and Chairman, CII FMCG Committee Bharat Puri said: "The Union Budget through its inclusive and strategic measures aims to boost consumption, attract investments, and create jobs, fostering a vibrant and sustainable economy."

Sunil Agarwal, Co-founder and Chairman of RSH Global said rationalising tax slabs will also augment consumer purchasing power, stimulating economic expansion and consumer spending.

"Furthermore, the infrastructure development plan for urban and rural markets will have a dual benefit. It will not only create new income opportunities for rural consumers but also enable FMCG players like us to expand and strengthen our distribution networks in rural, semi-urban, and urban areas, unlocking new markets and opportunities for growth," he said.