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Budget 2023: FMCG industry wants Bharat to spend more to bring back volumes

Improving margins by bringing back volumes is India Inc’s top priority. To achieve that, policymakers need to ensure more disposable incomes.

February 01, 2023 / 08:23 AM IST
Fertiliser subsidy is payments made to manufacturers or importers to cover the excess of the cost of production/import and distribution.

Fertiliser subsidy is payments made to manufacturers or importers to cover the excess of the cost of production/import and distribution.

Fast moving consumer goods (FMCG) companies faced a series of googlies in the year gone by.

Right about the time consumer spending was recovering from COVID-induced lockdowns, high commodity prices, spurred by the Ukraine-Russia war, rammed them head on.

Then, inflation reared its ugly head. Rural spending and non-food categories took a hit as India struggled to keep up with soaring prices. The consumer price index (CPI)-based retail inflation remained above the Reserve Bank of India's 6 percent target for 10 consecutive months.

Meanwhile, for FMCG companies, the top-line growth continued. They passed on raw material inflation by taking calibrated price hikes over a few quarters. According to NielsenIQ, the industry in value terms grew 10.9 percent year-on-year and 8.9 percent YoY over the past two quarters.