You better start shopping around: Adi Godrej

Which are the specific income groups that will benefit?

The Budget will benefit all income groups. First, the reduction in Cenvat rate from 16% to 14% will benefit all consumers because goods will become cheaper. Secondly, the increase in exemption in income tax from Rs 1,10,000 to Rs 1,50,000, and the higher exemption for women, will also benefit a large number of consumers.

Will loan waivers affect the rural credit culture? Did you see any major impact on consumption during the first loan waiver in 2004?

I don���t think the loan waiver will be a major problem if it is financed by the government. However, I don���t think it would be good if public sector banks are asked to foot the bill.

Do you see more disposable income for rural consumers? Will it help consumption?

There will be considerably more disposable income in the hands of rural as well as urban consumers thanks to the raise in the income-tax exemption limit. Debt waivers will also help rural consumers, which will add to consumption.

The common man had concerns about rising consumer prices. Do you think the Budget has addressed the concerns around inflation?

I do feel the Budget will be anti-inflationary. The biggest issue for price rise in consumer goods was the Cenvat rate. But the Budget has addressed that with the 2% cut. That is a huge anti-inflationary step and has sorted out the main issue
regarding inflation.

What is your view on the overall consumption story?

There was a slight slowdown in consumption in the past three months. The Budget provisions will help reverse the slowdown and revive consumption. The slowdown happened because interest rates rose and people chose to be a little cautious with their spending.

But again, the Budget has addressed this with the cut in Cenvat rate. Also, because the slabs are raised, there���ll be more money for consumption. So I believe the consumption story will be revived by the Budget.