New Delhi: FMCG and consumer durables companies are excepting continuation of rural employment guarantee schemes in the budget tomorrow to help boost demand across the country.
They are also expecting rationalization of the tax structure and a clear roadmap for the introduction of goods and services tax (GST), at the earliest.
“We expect the government to continue their focus on the rural sector with rural employment guarantee schemes and profitable supply of funds to those areas,” Dabur India CEO, Sunil Duggal said.
These measures would help the FMCG industry by boosting demand in rural areas and villages, he added. Demand from the rural sector helped the Rs1,00,000 crore industry grow at around 17-18% in the last fiscal despite heavy odds such as rising input costs, high inflation and the economic downturn.
According to industry experts, rural markets account for over 35% of the total sales of FMCG products in India.
“We do not expect any tax sops from the government in the budget ... but would like to see the government spending more on rural areas, which is not only good for FMCG segment but for the whole country,” Godrej Group chairman and managing director Adi Godrej said.
Consumer durable companies meanwhile are looking forward to rationalization of the tax structure and timely implementation of GST across the country.
Of late, there have been reports that the GST may not be implemented as scheduled from April 2010 because of various unresolved issues at the central as well as the state levels.
“To prepare a common platform for manufacturing units, the government must look for implementation of GST as promised in the previous budget,” LG Electronics India MD Moon B Shin said.
The tax boundaries need to be rationalized and state sales tax should be “communized”, without any exception of states putting any additional tax, Shin said.
Another major area of concern for the industry players is high customs and excise duties. Panasonic India has called for a reduction in the excise duty from 10% to 6%.