FMCG Budget 2011

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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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FMCG Budget 2011

Documents

Transcript of FMCG Budget 2011