In a bid to catch the pulse of the economy, the finance ministry has asked filed formations of both direct and indirect taxes to keep on sharing a sectoral update to North Block which will help in coming up with better policies to revive the slowing economy.
According to senior government officials, “Field formations have already started sharing updates on the economic activity to the government.”
“Field formations have shared that during the period of October sectors such as FMCG, Consumer goods, auto, cement and steel have continued to show poor sales. However, exports are likely to pick up, especially exports of handicrafts are showing a sign of revival,” government officials added.
“The entire idea of getting this update is that the government wants to keep sectoral analysis to help in making recommendations for upcoming Budget and policies to improve GST revenue collections,” sources added.
According to a recent survey on fast-moving consumer goods (FMCG), the FMCG manufacturers would witness even softer growth in the October-December 2019 period. Projections by market research firm Nielsen indicate that growth in Q4CY19 could be in the range of 6.5 to 7.5 percent. This can be compared to the 7.6 percent growth that the FMCG sector saw in Q3CY19. Nielsen has retained its annual growth forecast for 2019 for the FMCG market at 9-10 percent. In the last quarter, Nielsen had revised lower its earlier growth forecast of 11-12 percent.
Rural India, which contributes 36 percent to overall FMCG spends, has had its worst performance in seven years. Rural which was growing at 20 percent in Q3CY18 has grown only 5 percent in Q3CY19, according to data from market research firm Nielsen.
On the other hand, when it comes to exports, Director-General Export Promotion Council for Handicrafts (EPCH), Rakesh Kumar said, “The sentiment is picking up when it comes to handicraft exports. Recently, we had conducted a fair and the response was exciting than last year. Around 7300 overseas buyers and their representatives visited from 110 countries, the show was also visited by over 2000 domestic volume buyers. The fair generated business inquiries to the tune of Rs 3,750 crores. Orders have been booked, which is a good sign.”
Revenue Secretary Ajay Bhushan Pandey recently told CNBC-TV18, “During the last two months, we have also seen a few sectors such as cement, automobile and steel have not performed well.”