FMCG stocks gain after Finance Minister Nirmala Sitharaman announces employment schemes in Budget 2024

Over the last year, many states have boosted their budgets for welfare programs.

FMCG stocks rose after the Finance Minister announced schemes to boost employment in the Union Budget 2024, as higher incomes will raise the demand for consumer staple products.

Finance Minister Nirmala Sitharaman said, "The government has five schemes to facilitate employment and skilling for 4.1 crore youth
Central outlay of Rs 2 lakh crore."

At 11.10 am, the Nifty FMCG index was higher by almost a percent, while the Nifty 50 was flat. The top gainers on the index were ITC, Tata Consumer, Daber India and HUL, all higher by over 1.5 percent.

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The speech contained nine priorities for Budget 2024-25, ranging from productivity and resilience in agriculture, employment and skilling, inclusive human resource development, manufacturing, energy security, infrastructure, innovation, and next generation reforms.

Ahead of the Budget, analysts believed increased allocation for social sector spending and more welfare schemes could boost rural consumption and in the process, could change the game for FMCG companies.

During the interim budget, no special measures related to the FMCG or consumer staples space was announced. Over the last year, many states have boosted their budgets for welfare programs. These include enhanced cash transfers to farmers, bonuses above MSP, and farm loan waivers, along with increased capital expenditure.

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