Budget 2019: India Inc Speaks - Piyush Goyal does a MS Dhoni with his final-ball sixer

Finance Minister Piyush Goyal did an MS Dhoni on Friday with his last-ball sixer in the form of big-ticket Income-Tax cuts for the salaried class in India. The Dhoni act, which lifted sentiments across India, will actually translate to his party lifting the Cup (read Elections results), that’s yet to be seen. But, what could be said confidently is that the government pre-Election Budget will surely boost Consumer Demand, particularly for consumer staples and FMCG products.

It was a Budget aimed at the Consumption Class, from Bharat to India. It covered the Middle Class, the lower Middle Class, the unorganised sector worker and the rural consumer with a host of sops aimed at boosting their spending power. 

Not only does it promise to put more disposable income in the pockets of middle-class India, but it also seeks to improve the quality of life of people at the bottom of the pyramid. It is, undoubtedly, a great Budget for consumption.

Some key takeaways for the rural economy in this year’s Budget include the high Rs 60,000 crore allocation for under MNREGA and an additional Rs 19,000 crore allocation for constriction of rural roads. These steps would not only put more money in the pockets of rural consumers but also help companies better reach out to consumers in the hinterland. At Rs 6,000 per annum, the assured income support for small and marginal farmers may be a wee bit little to start with, but it’s definitely a step in the right direction. These, coupled with measures like increased interest subvention scheme for distressed farmers availing far loans and 2% interest subvention to farmers pursuing animal husbandry, are measures that tick all the right boxes when it comes to fueling consumerism the Rural and Agrarian Economy. 

I feel these measures would have a positive impact on sentiments in the hinterland and spur demand for consumer staples.

The FMCG industry has been witnessing rural demand growing ahead of urban India for several quarters now, and the announcements in this year’s Budget are expected to further fuel this growth. To ride this growth, Dabur has been investing in expanding its rural footprint and plan to expand our rural reach to 52,000 villages over the next couple of years.

The lower middle-class in urban India has been the other key target group for the government this year with a series of announcements like the social security coverage for workers in the unorganized sector, providing them an assured monthly pension of Rs 3,000, besides an increase in tax-free Gratuity limit. These are again steps in the right direction and would go a long way in improving their quality of life and also boost consumption by putting more money in their pockets. These measures, I feel, would also help bring a lot of households in the consumption class.

But the biggest beneficiary of this year’s Budget is middle-class India with the government’s decision to exempt tax on an income of up to Rs 5 lakh for individuals taxpayers and an increase in standard deduction to Rs 50,000. 

Amit Burman, Vice-Chairman, Dabur India