01 Jul 2019 20:04 IST

Will the Budget give consumption a boost?

Fiscal 2018-19 growth in private consumption expenditure was at its lowest in March 2019 quarter

On July 5, Finance Minister Nirmala Sitharaman will present the Union Budget. Measures that will boost consumption are expected, as consumer demand has been decelerating. With private consumption making up 50-60 per cent of GDP, the need for the government to incentivise it, especially in a slowdown year, becomes imperative. NDA 2.0 begins its term on a challenging note, with the consumption slowdown becoming well-entrenched in sectors such as automobiles, FMCG and consumer durables. 

Growth in the private consumption expenditure component of GDP trickled down to 7.2 per cent in the quarter ended March 2019, the slowest in fiscal 2018-19. Automobile sales is in a slow first gear and volume growth for FMCG companies has been moderating. 

In this video, Senior Assistant Editor Parvatha Vardhini C explains how this situation can be addressed