Consumer Non-Durable Sector :

Consumer non-durable sector has been under heavy weather in the last couple of years, with penetration having reached a very high figure in key categories and volume growth becoming increasing difficult to sustain. Pressed for topline growth, the industry has been looking for succours, in whatever form come. It is in this regard that Budget 2002 assumes a lot of importance.

The industry would be looking forward to concessions or reductions in Excise Duty (ED) from the Budget 2002, which could partly address the problem of declining volume growth. The impact of ED rationalisation steps taken by the government in Budget 2000-01 had been mixed for the segment, with some of the product categories seeing a decline in duties, while others like biscuit seeing an increase.

Some of the categories that witnessed changes in duty structure are,

Industry Wish list

Some of the key recommendations put forward by the industry are as follows

- Reduction in custom duty on oils and fats (palm oils), a key input in soaps, from 35% to 25%.

- Reduction in custom duty on Linear Alkyl Benzene (LAB) used in the manufacture of soaps, from 25% to 15%.

- The Special Excise duty (SED) on cosmetics and toiletries should be reduced to 8% from the existing 16%.

- Excise duty on cosmetics and toiletries containing alcohol, levied under Medicinal & Toilet Preparations (Excise Duties) Act, 1955, should be reduced from the present 50% to 32% with MRP abatement of 50%.

- The SED imposed on aerated soft drinks should be reduced from the existing 24% to 8%.

- Excise duty on products having MRP up to Rs2 should be reduced from 16% to 8% because such products of low value are used by the lower strata of society.

- Excise duty on sugar boiled confectionery up to a retail price of Re2 should be reduced from 16% to 8%. In case of other similar products where coinage is a problem, excise duty should also be reduced from 16% to 8% where MRP is up to Rs2.

- MRP exemption on soaps, detergents and scouring preparations should be enhanced from 35% at present to at least 40% subject to the need for it being proven by data on post manufacturing expenses, sale costs etc.