While rural real wage growth is around 5%, urban real wage growth is in the 7- 8%.range
The fast-moving consumer goods (FMCG) sector’s top expectation from Budget 2025 is initiatives to increase disposable income. Tax relief, higher exemption limits, and other fiscal measures are expected to stimulate consumption, benefiting both rural and urban demand.
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More funds for job creation and housing projects could encourage people to spend more. While demand in rural areas is improving, urban demand, which makes up about two-thirds of FMCG sales, is still weak and needs specific support to pick up again.
Policy measures such as changes in direct taxation, initiatives for affordable housing, increased allocations for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), and job creation programs are being closely monitored as crucial factors for driving economic growth.
The budget will have to address several challenges, including decelerating economic growth, falling value of Rupee against the US dollar and moderation in consumption demand.
Finance Minister Nirmala Sitharaman on February 1 will present a record eighth consecutive budget that is expected to contain measures to shore up weakening economic growth and ease the burden on the middle class struggling with high prices and stagnant wage growth while being fiscally prudent.
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