India’s New Delhi, January 21: In order to stimulate consumption and expenditure in the economy, the retail and fast-moving consumer goods (FMCG) industries have emphasized the need of include investments in digital infrastructure, skill development, and MSME promotion in the next union budget.

These steps are essential for promoting development, especially in rural regions, according to a research by Axis Securities.

It said, “Investments in digital infrastructure, skill upgradation, job creation, and MSME development to indirectly reignite consumption and spending in the economy, especially in rural areas.”

According to the analysis, boosting agricultural and non-farm earnings and making targeted investments in job development might be crucial to recovering the rural economy.

Along with government programs and incentives, it also said that measures like the Mahatma Gandhi National Rural Employment Guarantee Act’s (MNREGA) enhanced allocations are anticipated to boost rural areas’ buying power.

The research also emphasized how crucial it is to raise capital spending on rural connectivity and infrastructure in order to enhance demand. According to the sector, these actions would promote economic recovery and increase consumption in neglected regions.

The paper argues that more funding should be allocated to urban development initiatives and the services sector since urban regions also need attention. In addition to generating employment, this would increase remittances and stimulate urban consumption.

The FMCG industry has made the modification of income tax slabs a top priority in order to boost demand across all consumer groups and enhance disposable income.

The industry has cautioned against increasing the National Calamity Contingent Duty (NCCD) or excise taxes on cigarettes and tobacco products, nevertheless, since this might have a detrimental effect on cigarette producers.

“Revising income tax slabs will increase demand across the consumer sector,” it said. Cigarette firms may suffer if excise taxes or NCCD duties are increased on cigarettes and tobacco products.

The research also advocated for more expenditure in rural areas to help disadvantaged groups, particularly when restrictive monetary policy and inflation have reduced their buying power. In order to address the wider economic issues, it suggests a greater emphasis on affordable housing as well as ongoing assistance in the form of food and fertilizer subsidies.

If included in the budget, the report’s recommendations might support demand and promote long-term development in the FMCG industry and the overall economy.