Rural demand has been outpacing urban consumption for nearly the past seven quarters
“The government’s targeted interventions in infrastructure development, domestic manufacturing, ease of doing business, and the GST 2.0 transformation have contributed to a more stable and predictable business environment. Continued focus on employment creation, rural development, and inflation management will be critical to sustaining consumption growth,” said Saugata Gupta, MD & CEO, Marico Ltd.
“As the Union Budget approaches, it presents an opportunity to accelerate momentum through targeted tax reforms, continued capital expenditure, and policies that support entrepreneurship, incentivise manufacturing to secure strategic supply chains, and foster innovation across critical sectors,” Gupta added.
Sudhir Sitapati, Managing Director & Chief Executive Officer, Godrej Consumer Products Ltd, stated that the industry’s key expectation from the Budget is “efficient measures to boost consumption”. “We also believe that higher allocations for infrastructure-linked to labour and water-intensive categories should be released in a timely manner. That said, the sector has already seen significant stimulus over the past year, and continued focus on consumption will help sustain growth,” he added.
Sitapati pointed out that there are a few large, mass-consumption FMCG categories, especially in home care, that continue to be taxed at 18 per cent and could logically move to a lower slab such as 5 per cent to support demand.
Major engine
FICCI’s pre-budget memorandum noted that with Private Final Consumption Expenditure consistently accounting for over 56 per cent of the GDP, the trajectory of private consumption is crucial in shaping overall economic performance, as household consumption remains a major engine of growth in a consumption-led economy like India.
Rural demand has been outpacing urban consumption for nearly the past seven quarters. Akshali Shah, Executive Director, Parag Milk Foods, stated, “While urban demand is showing signs of recovery, rural consumption — though resilient — requires continued policy support, especially in the face of monsoon risks and inflationary pressures. Looking ahead, we hope Budget 2026 will continue to strengthen agricultural and dairy infrastructure, support rural development, and encourage the adoption of modern technology.”
While the FMCG industry has witnessed some uptick in demand post implementation of GST 2.0, it expects to witness the full benefits to be visible in the March quarter.
Published on January 13, 2026
