The consumer sector comprising auto, auto components, fast-moving consumer goods, consumer staples, hotels, is reeling under slowdown pressures and is eagerly looking at the upcoming annual Budget. To be announced this Friday by the new minister of finance and corporate affairs Nirmala Sitharaman, the expectation is that the National Democratic Alliance (NDA) government in its second term will find ways to ease the stressed situation in the market.
Addressing issues like liquidity crunch in the non-banking finance company (NBFC) sector, a more favourable Goods & Services Tax (GST) rate with and without input tax credit options for hotels, restaurants, retailers in addition to reducing GST on a host of consumer durables/ electronics items are a handful of things that could make a difference. Additionally, giving more money in the hands of the tax paying, middle-class consumers, who have been doing a balancing act between subsistence and savings is another crucial aspect that needs to be looked into.
One of the most important areas the government has to look into is job creation. One of the reasons is that sectors which enable employment generation are in a crunch owing to cost pressures and slowdown in business. This has led to cut down in manufacturing activities, inadequate new project launches and so on. If India has to grow at a sustainable rate over the next five years, it will require a conducive business environment and appropriate policies that will help kickstart the virtuous circle.