Cheaper fuel and lower food inflation are expected to add an additional Rs 1.4 lakh crore to the purses of Indian households in 2015-16 for spending, according to a research report issued by credit rating agency Crisil on Tuesday, reports fe Bureau in New Delhi. If this happens, it could be a major boost to the consumer goods and durable sector in the country. “The fall in food inflation and lower fuel prices will together yield additional savings (or increase in spending power) of R1.4 trillion in fiscal 2016 compared with nearly R50,900 crore in fiscal 2015,” the report said.
Of the Rs 1.4 lakh crore in expected savings, Rs 30,000 crore is expected on account of savings in households’ food bills, and the remaining is estimated on account of lower fuel prices.
Consumer price inflation is estimated to average at 6.5% in FY15, compared with 9.5% in FY14. It is estimated to dip further to 5.8% in FY16. Food inflation is expected to hover at 7% in FY15 and nosedive further in the next fiscal to 5%.
On a sectoral basis, Crisil expects passenger vehicles sales to grow by 9-11% in 2015-16, up from 3-5% in the current fiscal. Sales of household appliances are also expected to rise, including a 9% rise in television sales, 15% rise in air conditioner sales and a 10% increase in refrigerator sales.