– By Saket Gaurav
The Union Budget 2024 holds promise to steer India towards a high-growth trajectory. India’s economic progress can be shaped by implementing key changes in policies and reforms focused on industrial growth, particularly in consumer durables. Strategic changes, discussed below, can have a profound effect on consumer behavior across the country.
Tax Reforms and Reliefs
A lower tax rate or increased tax exemptions can lead to more disposable income for individuals, which will increase consumer expenditures, particularly in the consumer durables sector. Increased disposable money can drive sales of smartwatches and smart TVs as individuals feel safer and tend to spend more on leisure and health-related goods.
Subsidies and Incentives
In addition to subsidies and incentives available currently, consumers who buy electric vehicles or install solar power plants should receive additional benefits. These provisions will encourage more consumers to make eco-friendly choices, ultimately benefiting the environment.
Economic Growth Projections
The Union Budget 2024 should bring a holistic approach towards benefiting the economy. A thriving economy boosts consumers' confidence in their financial stability, encouraging them to invest in durable goods. This greater confidence frequently leads to higher purchases of products such as air conditioners, refrigerators, and other household appliances. As consumer spending rises significantly, it benefits both manufacturers and retailers.
Inflation Control Measures
We anticipate certain inflation-control measures this year from the budget that would stabilize prices and make commodities more affordable to end customers. When inflation is kept under control, purchasing power rises, allowing customers to spend more on their lifestyle. This may result in increased demand for consumer durables, as steady pricing makes these items more accessible to a larger audience.
Employment Generation Schemes
A number of special reforms for generating employment are expected in Budget 2024. Higher employment rates imply that more people have consistent incomes, which leads to increased spending power. As people strive to better their quality of life, they frequently increase their expenditure on lifestyle and durable goods.
Support for MSMEs and Startups
The rising pool of MSMEs and startups has the potential to significantly impact the Indian economy. When small and medium-sized businesses grow, consumers benefit from greater choice and variety. This promotes competition and innovation, which leads to improved products and services for customers. Encouraging the expansion of MSMEs and startups can result in a more dynamic and consumer-friendly market environment.
Infrastructure Development
Improved infrastructure, such as better roads and transportation networks, improves market access, making it easier for customers to buy goods and services. This benefits local economies while also increasing the consumer base for a variety of products, including consumer durables.
Digital India Initiatives
Digital India signifies a huge advancement in India’s economic development. Promoting e-commerce and digital payments through policies and improvements that promote Digital India, such as the Open Network for Digital Commerce (ONDC), can significantly impact consumer behavior. As more people shop online, the demand for digital payment solutions and e-commerce platforms increases. This change, aided by efforts such as ONDC, may result in an increase in online transactions, helping companies that adapt swiftly to digital trends.
Agricultural Reforms
The next wave of buyers will be from rural India. Special arrangements to promote rural incomes can lead to increased sales of consumer durables from rural areas. Consumers in rural areas are more likely to invest in improving their level of living if they have some discretionary income.
Healthcare Investments
Lower healthcare costs, such as reduced GST rates for health insurance, can allow individuals to spend more on lifestyle items and consumer durables. This can lead to greater demand for a wide range of items, which helps to boost overall economic growth.
Education and Skill Development Programs
Education and skill development initiatives increase career prospects, resulting in increased incomes for individuals. Consumers are more inclined to spend on education-related items and services as their career prospects improve and their wages rise. This can increase demand for smartwatches, computers, and other instructional tools, boosting the consumer durables industry.
As we anticipate these changes, businesses must adjust and align their strategy to meet the changing needs of consumers in this dynamic market climate.
(Saket Gaurav is the Chairman & Managing Director at Elista.)
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