New Delhi, Feb 2: The Union Budget 2026 is expected to have an overall moderately positive impact on the fast-moving consumer goods (FMCG) sector in the domestic economy, according to a report by State Bank of India.
The report stated that several Budget proposals are likely to support rural income, agricultural productivity, and employment generation, which are key demand drivers for the FMCG sector. These measures are expected to strengthen consumption, especially in rural and semi-urban markets.
The budget announced the launch of Bharat-VISTAAR, a multilingual artificial intelligence tool. The platform will integrate the AgriStack portals and the Indian Council of Agricultural Research (ICAR) package on agricultural practices with AI systems.
According to the report, this move is expected to improve access to information for farmers and enhance farm productivity, which can have a positive spillover effect on rural consumption.
The Budget has also announced the integrated development of 500 reservoirs and Amrit Sarovars to strengthen the fisheries sector.
The report noted that this initiative will support livelihoods linked to fisheries and allied activities, thereby improving income levels in rural areas.
To create quality employment opportunities in rural and peri-urban regions, the government has proposed support for the animal husbandry sector through entrepreneurship development. This includes initiatives such as a Credit-Linked Subsidy Programme, scaling-up, and modernisation of livestock enterprises.
The report said these measures are expected to boost rural employment and income, supporting demand for FMCG products.
In addition, the Budget has proposed support for high-value crops such as coconut, sandalwood, cocoa, and cashew in coastal areas. It also includes support for agar trees in the Northeast and nuts such as almonds, walnuts, and pine nuts in hilly regions.
According to the report, this focus on diversified and high-value agriculture will help improve farm incomes across regions.
Another key proposal is the setting up of Self-Help Entrepreneur (SHE) Marts as community-owned retail outlets within cluster-level federations, supported by enhanced and innovative financing instruments.
The report noted that this initiative could strengthen local distribution networks and improve market access for rural producers.
Looking ahead, the report said the outlook for the FMCG sector remains cautiously optimistic. Continued easing of food and commodity inflation, improving rural sentiment, and steady employment conditions are expected to support consumption growth in the coming period.
(ANI)
