Rural FMCG Demand Revival: Reactions Post Interim Budget 2024
High-ranking executives from some of India’s top consumer goods companies, including Adani Wilmar, Vi-John, and Parle Products, have expressed hopeful outlooks regarding the revival of the country’s rural demand for FMCG products following the announcement of the 2024 Interim Budget. In spite of existing liquidity concerns in the market, these leaders remain confident about the capabilities of India’s rural market. They support their optimism with predictions of a positive rabi crop season and governmental measures aimed at bolstering the economy.
How the Interim Budget 2024 Spurs Growth Expectations
India’s retail industry, particularly the FMCG sector, has responded favourably to the announcements made in the Interim Budget 2024. The sector has received the budget’s focus on comprehensive growth, promotion of Nano DAP in agricultural areas, and initiatives aimed at boosting consumer disposable income positively. These measures are expected to reignite rural demand. By focusing on empowering the agrarian community, digital infrastructure, dairy sector, and MSMEs, the budget signifies the government’s commitment to promoting sustainable agricultural practices.
Forecasting the Acceleration of Rural FMCG Demand
Rural India has been a key player in the FMCG market for the past ten years, accounting for approximately 40% of the industry’s sales. As a result, the potential bounce-back of rural FMCG demand following the budget’s announcement has incited hopeful predictions from industry leaders. Vimal Pande, the CEO of Vi-John, foresees an increase in demand once the rabi crop harvest is underway. Angshu Mallick, CEO of Adani Wilmar, and Mayank Shah from Parle Products also anticipate a positive impact on long-term rural demand following the budget’s emphasis on rural consumption, employment, and increased capital expenditure.
Government Initiatives and Forthcoming Elections: Fuelling Rural Consumption
The government’s introduction of programmes such as Lakhpati Didi, PM Awas Yojana, and PM Mudra Loans are projected to fuel rural consumption progressively. In addition to this, the imminent elections are likely to ignite demand in rural regions as campaign expenditures generally translate into an uptick in consumption, primarily food products. As per Roosevelt Dsouza of NIQ, the government’s dedication to enhancing living standards via initiatives in education, housing, tourism, and loan schemes, merged with a considerable uptick in capital expenditure, will likely promote consumer and industrial growth. This expected growth is projected to pave the way for enhanced infrastructure and more job opportunities in rural and urban India alike.
