Post on 06-Apr-2018
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Budg
et2011-
2012
Fmcg
sector
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GROUP MEMBERS
NEHA GALA 11
TARA JAIN 20
RIDDHI PAREKH 34
PARAS SAVLA 43
JATIN SHAH 45
VIREN SHAH 53
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INTRODUCTION OF FMCGSECTOR
The term FMCG refers to Fast Moving ConsumerGoods.
FMCGs have a short shelf life, either as a result ofhigh consumer demand or due to the productdeteriorates rapidly.
FMCG sector is the 4th largest sector of Indianeconomy and has a market size of about Rs 130,000
crore.
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The Main Characteristics Of FMCG
From the consumers' perspective:
Frequent purchase
Low involvement
Low price
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From the marketers' angle:
High volumes
Low contribution margins.
Extensive distribution networks
High stock turnover
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Reduce excise duty on sugar confectionary from 10% to4%, reduce excise duty on condensed milk from 10% to 4-
8%
Increase in allocation from various programs to enhancerural income.
Clarity on road map to GST implementation.
Allow FDI in multi brand retail.
Give retail industry status.
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Exemption of service tax on rentals.
Incentives on infra development and
manufacturing which will aid organized retail.
Hike in income tax exemption limit to lead
higher discretionary spend.
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What Budget Does
Reduction in central excise duty on sanitarynapkins, baby and adult diapers from 10% to 1%
Central Excise duty maintained at 10%
Exemption limit for the general category ofindividual taxpayers extended from Rs.1,60,000 toRs. 1,80,000.
Rural Infrastructure Development Fund increasedfrom Rs. 16,000 crore in FY11 to Rs. 18,000inFY12.
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Indication of GST rollout
10% excise duty on branded garments
1% excise duty on branded jewellery
No hike in excise on cigarettes
Mat hiked from 18% to 18.5%
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FMCG INDEX
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Impact on sector
Enhanced rural spends spell positive forthe FMCG sector as rural markets aregrowing faster than urban
Indication on GST rollout is promisingfor both FMCG and retail
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Impact on Companies
Reduction in excise on sanitary napkins anddiapers is a huge positive for P&G, Johnson &Johnson , GCPL
No excise hike in cigarettes is positive for ITCltd. and Godrey Phillips
Enhanced rural investments- positive for
Colgate, Dabur , Godrej Consumer Products,HUL, ITC & others
Godrej Industries to benefit from the oil palmplantations initiatives
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Britannia may increase the prices of its
products due to the 1% hike in excise duty.
Candy makers Parle Agro & Perfetti may
phase out 50 paise candies from the marketdue to hike in excise duty from 4% to 5% onconfectioneries.
Excise duty on LED bulbs reduced from 10%to 5%
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