How Budget failed to boost the FMCG sector

For an economy waiting for a consumption-driven boost, the Budget 2019 proved to be a disappointment. Though the Budget had provisions to improve the ease of living, there was no major immediate measure to boost disposable incomes. Measures like smoothening of labour laws, improved sanitation, investment in agri infrastructure and water security are long-term in nature and would have a long-term impact on improving rural incomes.

Incidentally, the word consumption occurred only twice in the Budget speech – reflective of the government’s low priority on spurring consumption. The S&P BSE FMCG Index rose marginally with most stocks trading a tad higher. The HUL stock trades marginally lower at 0.2 per cent.

There has been a very small increase in the excise duty of 0.5 paise per cigarette stick. Such a marginal increase in excise duty failed to dampen ITC stock. From being in red, the stock price increased and rose 0.6 per cent.