FMCG firms want Union budget to focus on rural wages, job creation
New Delhi: Ahead of the Union budget, FMCG companies have pitched for policies that focus on rural markets to reverse slide in wages, create more jobs and reduction in personal tax slabs to give more purchasing power to consumers.
Besides, the industry has sought incentives for setting up warehousing and cold chain facilities and efforts to increase Foreign Direct Investment (FDI) in the sector.
“Rural wages have been trending down and growth has been stymied due to insufficient job creation and tepid growth in disposable income,” Godrej consumer products managing director and chief executive officer (CEO) Vivek Gambhir told PTI.
Putting forth industry’s budget wish list, he added: “Focused efforts are needed to improve agricultural productivity and better target subsidies to put more money in the hands of farmers.”
With regard to job creation, Gambhir said accelerating rural development projects, especially in infrastructure, and making concrete efforts to boost the MSME sector, will lead to more productive jobs being created outside agriculture.
EY tax partner Prashant Khatore said the government needs to bring policies to increase consumption, like reduction in personal income tax enabling more disposable income.
Echoing similar views, Gambhir said: “Reduction in personal income tax slabs would provide relief to the middle and salaried class, increase disposable income and put the cash back in the economy”.
EY in a survey had stated that the government was likely to tweak income tax slabs and rates in Budget 2018-19 to bring down the burden on individuals, while there is unlikely to be any change in the current taxation of dividends.
EY India partner and India region tax leader, consumer products and retail Aashish Kasad said: “There is a need for incentives to be provided for setting up warehousing and cold chain storage facilities.”
Industry players said the government needs to make labour markets more attractive and resume stalled infrastructure projects, to create more jobs across sectors. The budget for 2018-19 will be presented on 1 February.