Consumer Industry Leaders Push for Tax Relief and Middle-Class Support in Budget
Chief executives of India's leading consumer goods companies are advocating for significant tax reductions and broader economic measures aimed at increasing disposable income among the middle-class. This push comes as consumption shows signs of recovery after prolonged sluggishness, though industry leaders warn that external macroeconomic factors could disrupt this positive trend.
Strengthening Purchasing Power and Agricultural Support
Mayank Shah, vice-president at Parle Products, emphasized that the upcoming budget should focus on strengthening purchasing power, particularly in price-sensitive urban and rural markets. "The Budget can support recovery in consumption by strengthening purchasing power, particularly in price-sensitive urban and rural markets. At the same time, allocate budget and take initiatives to improve agri/farm sector to ensure steady input prices which can help FMCG companies manage costs without passing them on to consumers," Shah stated.
Addressing Consumer Durables and Import Costs
Kamal Nandi, business head and executive vice-president at the appliances business of Godrej Enterprises Group, highlighted the need to support middle-class first-time buyers of consumer durables. This sector has been adversely affected by rising commodity costs and currency depreciation, which increases import expenses when the rupee weakens. Nandi added, "Additionally, measures that help ease cost pressures - such as stable import duties on essential raw materials and support for domestic manufacturing will allow companies to avoid passing the full benefit of cost inflation to consumers."
Tax Rationalization for FMCG Categories
Sudhir Sitapati, managing director and CEO at Godrej Consumer Products, pointed out that several large, mass-consumption FMCG categories, especially in home care, continue to be taxed at 18%. He suggested moving these to a lower tax slab, such as 5%, to stimulate demand. "There are a few large, mass-consumption FMCG categories, especially in home care that continue to be taxed at 18% and could move to a lower slab such as 5% to aid demand," Sitapati explained.
Managing Input-Cost Volatility and GST Issues
Prashant Peres, general manager for India at Mars Snacking, noted that the industry requires meaningful support to manage input-cost volatility. This is particularly crucial for categories impacted by inverted duty structures under the Goods and Services Tax (GST), which can lock up working capital and increase cost pressures for manufacturers. "The industry is also looking for meaningful support to manage input-cost volatility, particularly in categories impacted by inverted duty structures under GST which lock up working capital and add to cost pressures for manufacturers," Peres added.
Focus on Tariff Rationalization and Infrastructure
Sudhanshu Vats, managing director at Pidilite Industries, called for the budget to prioritize tariff rationalization and accelerated infrastructure investments. "Budget 2026 should focus on tariff rationalisation and accelerated infrastructure investments to strengthen the momentum on broad based growth," Vats emphasized. This approach aims to create a more stable economic environment that supports sustained consumption growth across various sectors.
Overall, India's consumer industry leaders are united in their call for a budget that not only cuts taxes but also implements comprehensive measures to bolster middle-class spending power and shield local industries from global economic uncertainties. Their recommendations focus on creating a more resilient consumption ecosystem that can withstand external shocks while fostering domestic growth.
