From FMCG to jewellery, GST cuts lift festival spending mood

Already in the thick of the festival season, consumer companies are seeing a surge in demand as shoppers throng stores.

- AKSHARA SRIVASTAVA & SHARLEEN D’SOUZA.

The glow of celebrations has been matched by the shine of lower price tags, after the government trimmed maximum retail prices across a range of goods with the recent cut in goods and services tax (GST).

In fast-moving consumer goods (FMCG), the effect has been immediate, with sales lift-ingin double digits. Parle Productsis reporting a 15-20 per cent jump in sales even at the primary level — to distributors and stockists. “Buying was at a standstill butit is higherthan we had anticipated,” said Mayank Shah, vice-president at Parle Products.

“Reductions of tax slabs, government spend-ingcomingback, and reduction of rates will put more money into the hands of the consumer. ‘Urban demand bottomed outlast year thistime but things have been improving consistently. It issettoaccelerate from hereand will last beyond the festival season,” Sunil D’Souza, managing directorand chief executive officer at Tata Consumer Products, told Business Standard.