The fast moving consumer goods (FMCG) industry representatives have expressed disappointment in the Budget proposal to hike excise duty. They said they would be forced to increase prices at a time when sales were dull and margins under immense pressure, media reports from across the country say.
The Union Finance Minister Pranab Mukherjee, in the Budget for 2012-13, has increased excise duty to the pre-crisis level of 12% from 10%. Most of the FMCG sectors, especially clothing and apparel, were hoping for a complete roll-back of excise duty
"I expect this Budget to have a slightly inflationary effect due to the cascading effect of companies passing on the excise duty increase to consumers," Godrej Consumer Products Managing Director A Mahendran said.
Dabur Chief Executive Sunil Duggal is of the opinion that "the hike in standard excise duty is being seen as highly inflationary steps that may hurt consumerism
Marico Group Chief Investment Officer Milind Sarwate said, "the impact on Marico is somewhat negative, as the increase in the excise duty will push up cost."
According to the Emami Chief Executive NH Bhansali said "the excise duty hike will severely impact manufacturing sector."
Britannia Managing Director Vinita Bali said the steps introduced in the agriculture sector would lead to increased demand and consumption.