How India’s FMCG companies view Union Budget 2022-23?

Ahmed ElSheikh, President, PepsiCo India:

“Reviving economic growth, increasing consumption, and fostering investment to fuel post-pandemic growth have been key objectives for the government, and the Union Budget 2022 reflects this very intent. This year’s Union Budget lays forth a vision for India at 100 years. The Government is leading from the front by raising public sector spending to keep the economic recovery on track. Digitization combined with infrastructural creation will accelerate economic development, stimulate innovation and entrepreneurship enhance living standards while keeping sustainability at its core. The increased outlay for PM Gati Shakti projects for multi-modal connectivity, including 100 new railways logistics hubs coupled with steps like enhancing local oilseed production, extending the last date for starting production for new manufacturing units, encouraging alternate cropping will aid growth of the FMCG sector and further strengthen Government’s vision of an Atmanirbhar Bharat.”

Mohit Burman, Vice Chairman, Dabur India Ltd:

“Despite the tough economic situation, our Finance Minister Ms Nirmala Sitharaman has delivered a highly progressive and growth-oriented Budget that will surely kickstart the manufacturing engine. With this Budget, the Finance Minister has deftly juggled fiscal deficit with the prospects of economic growth, and it clearly displays the Government’s resolve to drive long-term economic growth by putting higher thrust on capital investment, besides continuing to focus on infrastructure development and encouraging Atmanirbharta, which has the potential to create 6 million new jobs.

The biggest takeaway for me in this year’s Budget is the government's bold move to focus on higher capital expenditure and investments to pump up the economy. It's also heartening to see the government's continued focus on Bharat, or rural India, with Rs 2.37 lakh crore worth of MSP direct payments to wheat and paddy farmers and greater thrust on financial inclusion by bringing the entire 1.5 lakh post offices into the core banking system. The higher MSP allocation will ensure disposable income in the pockets of farmers, which would in turn drive consumerism and consumption of branded daily use products.

The thrust on infrastructure development and rural connectivity would also aid companies enhance their rural presence and ride this demand growth. This would go a long way in improving penetration and driving consumption of FMCG products in the hinterland. At Dabur, we have been witnessing rural demand growing ahead of urban India, 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 our rural footprint and today reaches over 85,000 villages. The financial support being provided to farmers to take up agro-forestry is also a step in the right direction, and will not just protect but also propagate our country’s biodiversity.

In a nutshell, I feel, this is truly a Progressive Budget, which focusses on creating an enabling framework that would promote long-term economic growth. I would rate this Budget as 7/10.”

Mayank Shah, Senior Category Head, Parle Products:

“First of all, putting money in the hands of consumers really helps, so they go out and buy products. So that was more on the front of ensuring that the demand remained robust given that we have gone through two years of pandemic. That was something that industry expected, either by tax cut, or by increasing the slabs tax brackets or by probably increasing the standard deduction limit. Those were the things that we expected but not much has been done there.

However, on the second front of job creation, the government has done a lot. The budget talks about seven engines driven by PM Gati Shakti that will definitely boost employment and increase the number of jobs. The budget also talked about 60 new jobs to be created in the next five years. That is relatively a longer process compared to the first expectation which was putting money in the hands of consumers, which would have yielded immediate results. A 20,000 crore boost in transportation infrastructure will definitely help in terms of job creation going forward.

Another thing the government would have ensured on the rural front was increased allocation to MGNREGA or direct benefit transfer. In fact, they chose the other way. In terms of rural demand, when you’re talking about putting money in the hands of rural consumers by increased MSP and increased MSP allocation, it is also going to have an impact on the inflation because if you increase the MSP, that eventually is going to increase the cost of agri products, primary inputs in food processing. So, procurement is going to be increased. The current challenge ahead of most FMCG companies, which is managing inflation, probably would be aggravated, so I consider it to be neutral. Probably placing this money in the hands of consumers through MGNREGA or DBT would have ensured demand to remain robust.”

Kalpesh Parmar, Country General Manager, Mars Wrigley, India:

“The Budget for FY2022-23 is setting the path for a digital economy. To build a digitally inclusive society, we welcome the focus on financial, technological inclusion and digital infrastructure spending. This will stimulate holistic development, in rural as well as urban markets. The increase in provision allocated to the Rural Infrastructure Development Fund will have a positive impact on raising rural employment and eventually consumption through higher disposable incomes. We appreciate the government for taking comprehensive plans to transition to green energy as well as the steps that the Government has been taking towards ease of doing business in India.”

Ghanshyam Khandelwal, Chairman, BL Agro:

"The budget was as expected. We didn't anticipate the industry to take centre stage because several schemes for the FMCG sector have already been implemented in recent years. However, the mention of a rationalized strategy to improve domestic oilseed production and minimize reliance on imports was welcomed. A more promising statement was the package that centers on farmers adopting appropriate fruits and vegetables, as well as proper harvesting practices. The move will go a long way towards uplifting the food processing sector."

Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt Ltd:

"FM Nirmala Sitharaman’s Union Budget 2022-23 is a strong one that takes a future-ready strong pro-technology, pro-business and green energy stand and estimates India’s GDP to grow at about 9.2%, the highest among all great economies. It leverages the nation’s sturdy present position, and aims to expand it at an extremely macro level. The Gati Shakti masterplan shows a constructive plan to remedy the nation’s need for a world-class infrastructure and the PLI Scheme to generate at least 60 lakh new jobs over a 5-year period is another welcome move, after the couple of challenging economic years. The ramp up of capital expenditure by 35.40% to Rs. 7.50 lakh crore as well as the upgrade to the credit guarantee trust for micro and small enterprises with the necessary fund injection, adding approximately an additional Rs. 2 lakh crore in MSME’s bounty, are signs of the government loosening their purse strings for the needy sector.

With regard to Agriculture, the government is opening channels to boost chemical-free natural farming, and leverage Kisan drones towards crop assessment, digitisation of land records, and pesticides dissemination. There’s also the Rs 2.37-lakh crore worth of MSP direct payments set aside for wheat and paddy farmers that is a much needed aid for farmers. 

The launch of urban sector development plans for CoEs with an outlay of 250 crore, formulation of battery swapping policy, et al are definitive moves on the part of the government towards progress in every direction and across all mediums. The 'One Nation, One Registration' is a dream come true for business people while the directive to the private sector to seek sustainable business models for battery and energy as a service is a clear step in the green energy direction. The directive to connect MSMEs such as Udyam, e-shram, NCS & Aseem portals will widen their scope much further and leverage them as portals with live organic databases providing G-C, B-C & B-B services such as credit facilitation, enhancing entrepreneurial opportunities."