Bharat finally gets a taste of branding

Companies selling packaged and branded consumer goods expect to benefit from the sops for agriculture and rural sectors announced in the Union Budget. Said Bharat Patel, chairman, Procter & Gamble Hygiene & Healthcare,” Increased spending in agricultural, rural and social sectors will definitely help raise the standard of living for the masses, which in turn should help boost the demand for daily consumption products." As affluence and exposure to urban centre grows, rural India is predicted to be one of the largest consumption markets. "The inclusive growth policy of the government could translate into improved quality of life at the bottom of the pyramid. This will increase disposable income, consumption and FMCG demand," said Marico Ltd CMD Harsh Mariwala. A reduction in customs duty on plastics would also help in overall cost efficiencies and savings. There would also be a marginal impact because of the removal of product sampling and in-store displays expenses from Fringe Benefit Tax. Dabur India CEO Sunil Duggal said that the reduction in central sales tax by 1% will serve to bring down costs. Industry analysts say that such cost savings could either lead to higher spends on advertising and promotion or price reductions for consumers. Since FMCG products have witnessed rising input costs which have in turn resulted in price hikes at the consumer end, savings on costs would stabilise inflationary pressures. What will help the sector is the likely rise in disposable incomes as a result of Income Tax exemption limits going up. This could lead to higher per capita consumptions too. The Rs 80,000 crore FMCG industry thrives on supply chain efficiencies necessary to make these products relevant to even a person earning Rs 3,000 per month.

Courtesy: EconomicTimes
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