The fast moving consumer goods (FMCG) industry yesterday expressed disappointment with the budget proposal to hike excise duty and said it would be forced to go in for a price hike at a time of slack sales and shrinking margins.
Finance minister Pranab Mukherjee hiked excise duty to the pre-crisis level of 12 per cent from 10 per cent.
Godrej consumer products managing director A Mahendran said he expected the budget to have a slight inflationary impact given the cascading effect of companies passing on the excise duty increase to consumers.
According to Marico Group chief investment officer Milind Sarwate the impact on Marico was somewhat negative, as the increase in the excise duty would push up costs.
Britannia managing director Vinita Bali said the steps introduced in the agriculture sector would spur demand and consumption. She added, some positives of the budget included raising the plan outlay for agriculture by 18 per cent, initiatives for R&D in farm sector, allocations for improving warehousing and storage facilities for agricultural produce.
According to Bali, all these, executed well and on time, would address the supply side on food and agriculture and drive domestic demand and consumption, which was one of the key priority areas.