GST Rate Cut Ignites Festive Boost in FMCG Sector
The reduction in GST rates on personal and daily essentials is expected to revive domestic consumption, especially in rural areas, supporting the FMCG sector's long-term growth. The reform benefits include more affordable consumer products and increased consumption, which industry experts describe as a 'game changing' move.
- Country:
- India
The latest reduction in GST rates on commonly used personal items and essential products is poised to significantly enhance domestic consumption, according to industry experts. Implemented just ahead of the festive season, the measure is expected to inject momentum into the economy and foster sustained growth in the FMCG sector.
Industry leaders have lauded the GST Council's decision to cap rates at 5% for consumer food products, effective September 22. This move is anticipated to drive inclusive economic growth and expand market accessibility by making crucial consumer items more affordable, especially during the festive period.
FMCG companies plan to transfer GST savings to consumers through increased product grammage or lowered prices. Market projections suggest a potential 8-10% reduction in prices, depending on brand strategies, which could boost FMCG industry growth by 2-3%. Companies are swiftly adapting to new pricing structures to maximize benefits for consumers.
(With inputs from agencies.)
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