
MUMBAI: Consumer-facing businesses—ranging from everyday consumables to big-ticket items like automobiles—are optimistic that the government’s decision to cut personal income tax will lead to higher disposable income, ultimately driving demand. The tax relief comes at a crucial time when urban consumption has been under pressure, as highlighted in recent quarterly earnings of major FMCG companies.
Finance Minister Nirmala Sitharaman on Saturday proposed exempting income up to Rs 12 lakh from tax, with salaried taxpayers benefiting from a higher exemption limit of Rs 12.75 lakh due to a Rs 75,000 standard deduction. Additionally, individuals in higher tax brackets will see benefits of up to Rs 1.10 lakh under the new tax regime.
Gautam Singhania, Chairman & Managing Director of Raymond Group, called the exemption of income tax up to Rs 12 lakh a “game-changing reform,” expected to drive household spending—an essential growth driver for sectors like retail and real estate.
“With the middle class now driving nearly 60% of domestic consumption, rising purchasing power is likely to accelerate demand for aspirational and premium products,” he added.
Angshu Mallick, Managing Director & CEO of Adani Wilmar, echoed similar sentiments, stating that the focus on tax relief and increasing disposable incomes—especially for the middle class—is a positive move that will strengthen purchasing power and drive demand for quality food products.
“This focus on the middle class addresses a long-standing demand and is a positive step towards a more inclusive and robust economy,” said Mohit Malhotra, CEO of Dabur India. He believes the move will help curb the slowdown in urban consumption and put it back on a growth trajectory.
The passenger vehicle (PV) industry, grappling with sales stagnation, is also hopeful that higher disposable incomes will encourage consumers to buy automobiles.
RC Bhargava, Chairman of Maruti Suzuki, stated that the auto industry’s growth is closely tied to consumers’ purchasing power and economic development, and the tax cut will be a key factor in accelerating demand for various consumer products.
Anish Shah, Group CEO & MD of Mahindra Group, noted that the revised tax structure will encourage private sector capital expenditure. He added, “The theme of ‘Make in India for the World’ remains a key focus in this budget, with efforts to reduce India’s manufacturing costs poised to significantly enhance the country’s global competitiveness.”
Pawan Munjal, Executive Chairman of Hero MotoCorp, emphasized that tax relief will stimulate economic activity and unlock consumer potential, while simplified tax regulations will enhance the ease of doing business. “Meanwhile, green energy investments and EV policy support will accelerate India’s shift to a clean, sustainable economy, positioning it as a leader in innovative mobility,” he added.
The jewelry industry is also optimistic about a demand surge. TS Kalyanaraman, Managing Director of Kalyan Jewellers, believes the tax reforms will ensure that the consuming class has more discretionary income, leading to a significant demand stimulus.
The electronics industry has similarly welcomed the budget. Pankaj Mohindroo, Chairman of the India Cellular & Electronics Association (ICEA), highlighted that rationalizing tariffs on key inputs and components creates a more competitive cost structure and encourages deeper integration with global value chains. “Additionally, measures like the enhanced income tax rebate will boost disposable incomes, stimulating domestic consumption—a key driver for electronics demand,” he added.
Pradeep Bakshi, MD & CEO of Voltas said that the proposed taxation reforms will strengthen the purchasing power of the middle class, enhancing financial flexibility and driving consumer demand.