Published on : Mar 03, 2015
India, the world’s second most populous country, one of the chief and largest economies of the world, and the third largest world economy in terms of purchasing power , and a fertile marketplace for a number markets, has presented its annual financial budget for the fiscal year 2015-16. The Budget outlines the government’s vision and also its fiscal deficit targets for the year. The budget provides a clear boost to the sectors of infrastructure, employment generation and social equity.
The budget also clearly lays down the timeline of implementation of the GST, the Goods and Service Tax, till April 2016, a step that is considered a welcoming step for the consumer goods market as the GST will help in increasing demand and reducing the cost of doing business in the country.
The Budget has reduced duty on 22 components in the consumer electronics and appliances sector of the market- but these categories largely comprise premium categories which have somewhat low penetration in India. This is not expected to have any short term effect on the local manufacturing segment as the premium categories still do not have a mass appeal or the sales do not see critical volumes in the local market of the country that would justify local manufacturing.
Overall, the Budget has not announced any major reforms for the country’s consumer durable industry. The reforms in the Budget make no effect on the market’s current situation also because the demand and consumption are weak and the budget has posed little or almost no impact on the situation.
The biggest challenges faced by the country’s consumer goods industry are the rising costs to serve and the stimulating demand. It has been made clear in a way that it’s upto the industry now to stir up demands because the Budget has not done anything special that can change the situation drastically.