FMCG firms cheer as PM Modi's I-Day announcements likely to boost demand

Business Standard

2 days ago

Fast-moving consumer goods (FMCG) companies expect to laugh their way to the bank this year as Prime Minister Narendra Modi's announcements in his Independence Day speech could boost consumption.
The announcement of the Pradhan Mantri Viksit Bharat Rozgar Yojana aims to support the creation of over 3.5 crore jobs in two years. The scheme will provide an incentive of up to Rs 15,000 in two instalments to newly employed youth and up to Rs 3,000 per month per new employee to employers for the creation of new job opportunities. Modi also announced GST reforms as a Diwali gift to lower the tax burden on the common man.
Because of these two announcements, consumer goods companies expect consumers to increase their budgets for purchasing more. This increased spending is expected to be seen particularly by the urban middle-class consumer.
'I think this is a bold move by the government, as reductions in daily essential items will push urban consumption higher,' Anghsu Mallick, Managing Director and CEO of AWL Agri Business (formerly known as Adani Wilmar), told Business Standard.
Parle Products, which sells biscuits like Parle-G, also sees consumption further growing with these announcements.
'This year is going to be very critical. I don't see any reason why companies will not do well,' said Mayank Shah, Vice-President at Parle Products. Shah explained that the company had targeted high single-digit growth for FY26 in the months of April and May. However, the announcements made in the past few months, like the Reserve Bank of India cutting interest rates, increasing the income tax rebate, and good monsoons, have already put more money in the hands of the consumer, giving a boost to consumption. 'With these slew of measures coming in, we expect to close the year with a minimum of 12-15 per cent growth,' Shah said.
Dabur India also expects the government's move to improve sentiment as the festive season approaches. 'As the festive season approaches, this move will help improve sentiments and put more purchasing power directly into the hands of millions of Indian families. This is more than just a policy shift; it's a signal of confidence in India's consumption story. It will energise demand, especially in rural and semi-urban markets, ease the burden on households, and catalyse growth for branded FMCG products,' said Mohit Malhotra, CEO of Dabur India.
Amul also expects the reduction in GST rates to benefit both the producer and the consumer. 'We have been requesting the government to reconsider the current GST rates, and once it is lowered, it will help bring prices down and also stimulate demand,' said the Managing Director at Amul. He also added that supporting the youth with jobs will encourage them and, more importantly, motivate them, which will further support consumption.