Budget 2010 to push up consumer expenditure

By Biprorshee Das , afaqs!, Mumbai | In Advertising | March 02, 2010
Reacting to the Union Budget, advertising and marketing pundits are of the view that with more disposable income, consumer expenditure would rise, which would lead to higher ad spends by companies

Reacting to the Union Budget 2010 presented by Finance Minister, Pranab Mukherjee, advertising experts are of the view that with larger disposable income, consumers would step up their expenditure, which would provide a fillip to the advertising industry.

Kamal Basu, chief executive officer, Saatchi & Saatchi, India

Every year, expectations from the Budget always encountered disaster. Hence, one stopped having any expectations and accepted whatever came one's way. However, this year, deep within, one did expect a tsunami arriving. The economy was stretched, prices rising and the common man feeling the heat. It was apparent that taxes would rise on personal incomes (the higher slabs) and for corporates. So, one was pleasantly surprised when there was no great shake. That itself was euphoric. So Mr Mukherjee, well done!

The reduction in surcharge on service tax is the only direct benefit to the ad industry. The reduction in prices of electronics and other categories will drive consumerism; and that is what will give our industry a fillip that it so needs.

Harish Bijoor, chief executive officer, Harish Bijoor Consults

The current Budget is very growth-oriented and is driven to create consumption. With the stimulus provided to companies removed, people will buy at higher prices. The Budget provides advertising and marketing a platform, an umbrella for growth.

The indications that the Indian economy will grow at 9 per cent is a definite positive. Economies growing at such a rate are a rarity globally.

In an inflationary economy like ours, marketers have to be competitive. There will be enough opportunities for marketers to showcase their products and services; and one can expect a lot of competition on the prices front.

Also, with newer services related to brands and event management being added to the gamut of the 10 per cent service tax, certain services will get more expensive, as the tax is passed on to the consumers.

Prathap Suthan, national creative director, Cheil Worldwide

The Budget is consumer-friendly. This means it leaves more money in the hands of the regular salaried people -- the essential middle class of India. And this ought to give them more confidence to buy things that they would have kept pushing. The Budget will stimulate the market and people will spend more freely.

This is good for advertising. Because in a scenario that encourages people to upgrade their lives, every brand and product that vies for market share will have to get more visible and spend more on advertising. We are in for better times.

This underlines the spirit and the innate strength of the Indian economy and the insulated robustness of our country as a whole -- to be positive, to be holding its head above and to be inspiring its people, when much of the world is still dealing with the effects of the global slowdown.

Nabankur Gupta, founder and chief executive officer, Nobby Brand Architects and Strategic Marketing

When consumer disposable income goes up, consumption rises. This will lead to a tendency for greater ad spends. One would witness this in the bulk of the market sectors, such as fast moving consumer goods, fashion and apparel and other such medium to lower priced items.

However, this will not be true for the higher ticket items, such as automobiles.

Ajay Chandwani, director, Percept

The reduction in prices of electronics is good. Cheaper mobile handsets and gadgets will result in more consumption and will push up ad spends.

However, it is disappointing that there has been no reduction in prices of computers. The reduction in prices of computers has not been as much as, for example, mobile phones. There is not much difference in the price of the cheapest laptop available today, compared to three years ago. That is one of the chief reasons why internet penetration is low, when one compares it to mobile penetration, which has been pushed by low-cost phones.

It is also disappointing that domestic travel is going to be expensive. This will bite into the bottomline of advertising and marketing companies.

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