It is a fine balancing act for FMCG companies. The slowdown in consumer spending is compelling them to push volume growth through discounts and aggressive marketing expenditure even as increased ad spends coupled with steadily rising input costs put pressure on their bottom line. While companies have to push volumes, they also have to minimize the resulting erosion in margins. Rising inflation is posing a threat to consumer spending. Marketers have to spend every extra penny to prevent customers from switching to a lower-priced product.

Photo sourced: consultace.com

Growing competition is also forcing them to market their products more aggressively than the competition. The Union Budget has made a two per cent hike in excise duty across the board while slapping levies on petrol and diesel, partially rolling back stimulus measures in the face of economic revival. Earlier, leading consumer products companies have said budget measures such as the partial rollback of excise stimulus and higher fuel and packaging costs have added to the already inflationary commodity environment and will have to be passed on to consumers some way or the other.

It will be another couple of quarters before the sector sees a sign of stable growth returning as intense competition recedes and consumer spending gets a boost again. Until then, investors should brace themselves for lower industry earnings growth of 10-12% against average growth rates of 15-17% registered earlier. Hence the act of balancing the hike in price and decrease in price needs to smartly manage by the FMCG companies which have a huge market shar

Budget expectations and possible impact on companies

The forthcoming Union Budget is expected to benefit sectors such as agro products, financials, capital goods, construction, IT services Budget with ET and utilities. Rising tax rates, however, are likely to be negative for the automobile and metal sectors. Full article here.

Union Budget 2010-2011: An analysis

While discussing the last year’s budget that it would be inflationary. In fact, the major public concern has been the double digit inflation raging the nation today. But this is only the second year of the new government, and the election time is still long off. Full article here.

Free gadget giveaway

Here’s latest free gadget giveaway folks. Technically, this isn’t actually a gadget giveaway because we are in fact giving away free cash. Full article here.

Union Budget 2010: Tele-com cos see mass local production

Domestic telecom manufacturing is about to take big strides, which will see mass local production of not merely the mobile phone, but for the first time, key accessories and components. Full article here.

3G will be a reality by September, finally

Mobile phone users will finally be able to access advanced data transfer and high-speed internet on their handsets through 3G technology and broadband wireless access (BWA), post-September 2010. Full article here.

Aditya Birla Minacs acquires UK-based BPO company

Aditya Birla Minacs, a global business solutions company, today announced the acquisition of UK-based Compass BPO Ltd, a leading pure-play end-to-end Finance and Accounting (F&A) services provider. Full article here.

Google opens Google Apps Marketplace

Google will launch on Tuesday evening Google Apps Marketplace, providing a venue for third-party, cloud-based applications to supplement Google’s own online applications. Full article here.

In the previous post i was talking about Direct Taxes, Indirect Taxes, Agriculture & Related Sectors which was benefited in this union budget. This post talks about the other related sectors which has equal effects of union budgets.

Infrastructure

• Project import status to ‘Monorail projects for urban transport’ at a concessional basic duty of 5 per cent granted.
• To allow resale of specified machinery for road construction projects on payment of import duty at depreciated value.

Medical Sector

• Uniform, concessional basic duty of 5 per cent, CVD of 4 per cent with full exemption from special additional duty prescribed on all medical equipments. A concessional basic duty of 5 per cent is being prescribed on parts and accessories for the manufacture of such equipment while they would be exempt from CVD and special additional duty.

Infotainment

• To address the difficulties experienced by film industry in importing digital masters of films for duplication or distribution loaded on electronic medium vis-a-vis those imported on cinematographic film, owing to a differential customs duty structure, customs duty to be charged only on the value of the carrier medium.

Therefore equally union budget has made a quit appreciable and head turns out effect in these sectors. So now it is about how as a common man we are going to tackle the tax issues and move smooth with a kind of budgeting which has a say over our budget as well.

Union Budget 2010 turned everybody’s attention towards it and still there is a lot of buzz about union budget which will take sometime to get settled because of oppositions and price rise in commodities and its adverse effects in a common man’s life. We all know that government has increased and deducted few tax rates but not sure how it’s going affect the different sectors which are going to be affected or benefited. We are here to present quick snap shots to the readers with key Budget Highlights. This post talks about all the Tax proposals and benefits that this Union Budget provides to different sectors.

Direct Taxes

* Deduction of an additional amount of Rs.20,000 allowed, over and above the existing limit of Rs.1 lakh on tax savings, for investment in long-term infrastructure bonds as notified by the Central Government.
* Besides contributions to health insurance schemes which is currently allowed as a deduction under the Income-tax Act, contributions to the Central Government Health Scheme also allowed as a deduction under the same provision.

Indirect Taxes

* Rate reduction in Central Excise duties to be partially rolled back and the standard rate on all non-petroleum products enhanced from 8 per cent to 10 per cent ad valorem.
* The specific rates of duty applicable to portland cement and cement clinker also adjusted upwards proportionately. Similarly, the ad valorem component of excise duty on large cars, multi-utility vehicles and sports-utility vehicles increased by 2 percentage points to 22 per cent.

Agriculture & Related Sectors

* Provide project import status with a concessional import duty of 5 per cent for the setting up of mechanized handling systems and pallet racking systems in ‘mandis’ or warehouses for food grains and sugar as well as full exemption from service tax for the installation and commissioning of such equipment.

I am sure all of us are very keen to know what the other sectors which is benefited through this union budget. The detailed post is followed in the next blog. Keep a watch.