Boosting Consumption Through Fiscal Measures

CII president and ITC CMD Sanjiv Puri has put forward a compelling argument for reducing taxes, lowering fuel costs, and cutting interest rates. He also suggests a 25% increase in government capital expenditure to rejuvenate consumption demand in the Indian economy. Puri's proposal includes a three-tier customs and GST structure aimed at stimulating economic growth.

Current State of FMCG and Consumption Trends

Despite a noticeable slowdown in growth, evidenced by recent company results, there's a silver lining. Improved monsoon seasons and agricultural productivity, alongside anticipated interest rate cuts, are expected to bolster rural consumption and stabilize urban spending patterns.

Addressing Supply Chain Issues and Inflation

Puri highlights the significant impact of agricultural sector reforms on consumption growth. With nearly half of India's workforce engaged in agriculture, enhancing incomes within this sector is crucial. He calls for next-generation reforms and the establishment of a national commission on agriculture resilience to mitigate weather-related vulnerabilities.

Global Economic Challenges and Opportunities

In the face of global economic volatility and geopolitical tensions, Puri emphasizes the importance of supply chain diversification, energy transition, digital transformation, and addressing demographic challenges. He advocates for increased public capital expenditure and progressive divestment of public enterprises to leverage global opportunities.

Private Investment and Economic Growth

Despite a growing economy, private investment remains below potential. Puri points to the need for demand-driven investment to fully utilize capacity and maximize economic impact. He remains optimistic about the direction of private investment, citing positive trends in capital goods orders and CII survey results.