2 et 2 g 1 r d 0 to u 2 B ec s cg Fm

11 0

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GROUP MEMBERS
NEHA GALA TARA JAIN RIDDHI PAREKH PARAS SAVLA JATIN SHAH VIREN SHAH 43 45 53 11 20 34

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INTRODUCTION OF FMCG SECTOR

The term FMCG refers to Fast Moving Consumer Goods. have a short shelf life, either as a result of high consumer demand or due to the product deteriorates rapidly.
FMCG sector is the 4th largest sector of Indian economy and has a market size of about Rs 130,000 crore.
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FMCGs

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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Budget expectation

Dont

increase excise duty

from

current 10%.
Reduce Reduce

MAT rate from 18%

dividend distribution tax from 15%-10%. exemption from 8% excise duty

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Reduce excise duty on sugar confectionary from 10% to 4%, reduce excise duty on condensed milk from 10% to 48% Increase in allocation from various programs to enhance rural 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. on infra development and manufacturing which will aid organized retail. in income tax exemption limit to lead

Incentives

Hike

higher discretionary spend.

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What Budget Does

Reduction Central

in central excise duty on sanitary napkins, baby and adult diapers from 10% to 1% Excise duty maintained at 10% limit for the general category of individual taxpayers extended from Rs.1,60,000 to Rs. 1,80,000. Infrastructure Development Fund increased from Rs. 16,000 crore in FY11 to Rs. 18,000in FY12.
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Exemption

Rural

Indication of GST rollout excise duty on branded garments

10%

1%

excise duty on branded jewellery hike in excise on cigarettes hiked from 18% to 18.5%

No

Mat

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FMCG INDEX

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Impact on sector
Enhanced

rural spends spell positive for the FMCG sector as rural markets are growing faster than urban on GST rollout is promising for both FMCG and retail

Indication

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Impact on Companies
Reduction

in excise on sanitary napkins and diapers is a huge positive for P&G, Johnson & Johnson , GCPL excise hike in cigarettes is positive for ITC ltd. and Godrey Phillips rural investments- positive for Colgate, Dabur , Godrej Consumer Products, HUL, ITC & others Industries to benefit from the oil palm plantations initiatives

No

Enhanced

Godrej
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 Britannia

may increase the prices of its products due to the 1% hike in excise duty. makers Parle Agro & Perfetti may phase out 50 paise candies from the market due to hike in excise duty from 4% to 5% on confectioneries. duty on LED bulbs reduced from 10%

Candy

Excise

to 5%
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