fast-moving consumer goods (FMCG) industry is seeking government intervention
to boost consumption in the economy as it is struggling with high inflation and
uneven rural demand.

companies are expecting several budget announcements such as increasing the
outlay under the Mahatma Gandhi National Rural Employment Guarantee Scheme
(MGNREGS) and tax reduction for the salaried class that will help to revive
demand in the economy.

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government should put money in consumers’ hands to ensure that the demand is
not affected. This can be done by lowering taxes on the salaried class or
by increasing the income tax slabs, said Mayank Shah, senior category head at
Parle Products.

A CavinKare
spokesperson said, “We would recommend that the government should introduce
measures to ensure more money is left in the hands of the salaried and middle
to accelerate consumption and demand,” as reported by MoneyControl.

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The companies
are seeking policies to boost the rural economy, which slowed in the previous
quarter after being a driver of FMCG growth since the beginning of the

government needs to increase the allocation under MGNREGS and continue with its
other schemes such as direct cash transfer and food subsidies, which have
supported the rural economy even as COVID-19 wreaked havoc in urban areas, said
Sanjiv Mehta, HUL Chairman and Managing Director, while addressing a
post-earnings virtual briefing.

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HUL indicated
a slowdown in the remote areas in the September quarter and demand in these
areas weakened in the December quarter.

Mehta added
that the headline value growth is still there in rural India, buy the volume
growth has turned negative.

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Rural areas
largely contribute to FMCG sales and a hit on demand in these areas has a
direct impact on their sales.

Emami, which
houses brands such as BoroPlus Navratna and Zandu and earns a major share of
its sales from rural India, expects the government to present a growth-oriented

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expect a budget that can drive steady growth post-pandemic,” said NH
Bhansali, CEO-finance, strategy and business development, Emami Limited.

Shah of Parle
Products also believes initiatives towards job creation would help in
increasing disposable income and demand generation in the economy. Increasing
the spending on infrastructure across urban and rural markets would result in
higher job creation, which will be positive for different sectors.