Government policies are amazing, FMCG sector growth will be strong

The outlook for the Fast Moving Consumer Goods sector, from packaged food items to personal care products, seems quite good this year. Some of the most significant government policies related to the industry are rising consumption and job creation opportunities. ICICI Lombard General Insurance has estimated in a report that FMCG may grow by 7-9 percent in 2024.

The report has also, however, expressed concern that the FMCG sector might feel inflationary pressure. Besides, consumer confidence is also weak. That means consumers can avoid spending on non-essential items. But still, the FMCG sector can grow well as the government is increasing spending on infrastructure. This is expected to bring money into the hands of the people.

The valuation of FMCG has crossed Rs 9.1 lakh crore. What is paramount is the contribution this sector makes to job creation with the rising economy of India. Moreover, sales through online channels for FMCG are also growing. Its valuation stays at Rs 1.7 lakh crores. The fast growth in D2C, which is Direct to Consumer, also shows how the way of shopping of consumers is changing.

The FMCG industry was gasping for breath after the Corona epidemic. More so regarding demand in the rural sector, it had fallen for several quarters in a row, as employment was hit hard by Kovid and people had reduced spending significantly. However, now things have improved much to a large extent. It can be understood that volume and value growth witnessed a big jump in the second half of 2023.

Major government initiatives like Gati Shakti and Amrit Kal Vision 2047 supported the FMCG sector tremendously by giving reasons for long-term growth. Because of these, "the risk index for the FMCG sector has dropped from 68 to 66". If the monsoon keeps on being good, the growth of the FMCG sector can remain even better.