More stocks, discounts returning to shelves

New Delhi | Kolkata: Consumer goods companies and retail chains are planning to loosen purse strings to attract customers after the government slashed corporate tax rates on Friday along with a series of other big-bang reforms to fuel economic growth and investments.
They are increasing promotional spends in the upcoming festive season by 10-15% over last year’s festive quarter and stocking up additional inventory, executives in some large FMCG companies told ET.

The companies hope to stimulate demand and leverage a revival in consumer sentiment.



“We are stepping up consumer promotions and discounting significantly over the last year’s festive quarter. Besides consumer sentiment, which is looking positive now, a competitive intensity too has kicked in among brands,” said Mayank Shah, senior category head in India’s largest biscuits maker Parle Products.

Niti Aayog chief executive Amitabh Kant tweeted on Sunday that bottom lines of corporates will greatly benefit after the government’s measures. “Due to repo rate cuts by RBI, interest rates are benign. Industry must now respond by price cuts and passing gains to consumers and dealers to kickstart the festive season. They must create a ripple effect,” Kant tweeted.

On Friday, finance minister Nirmala Sitharaman announced the slashing of the basic corporate tax rate to 22% from 30%, while for new manufacturing companies it has been cut to 15% from 25%.