GST reduction to boost consumption, will pass on benefits to consumers: Wipro Consumer

Bengaluru, Sep 2 (PTI) Wipro Consumer Care & Lighting expects improvement in consumer demand in the second half of this fiscal with the likely reduction in tax on consumer goods under the proposed GST rationalisation, its CEO Vineet Agrawal said on Tuesday.

The company, which sells FMCG products ranging from personal care with brands as Santoor, Chandrika, Yardley and Brahmins to Nirpara in the food segment, will pass on any benefit of a GST reduction to its consumers, he told PTI in an interview.

“Yes, we should be extending the benefits of GST reduction across our product categories to our customers,” Agrawal, who is also Managing Director of Wipro Enterprises, said.

When products become cheaper, after a reduction in the GST slab from 18 per cent to 5 per cent in some categories, outgo from consumers’ pockets comes down.

“With the consumer outflow coming down, he will have more discretionary money to spend in other categories. So, I would expect, clearly, the demand should go up with the GST coming down,” he said.

Agarwal said the FMCG industry was facing challenges because of food inflation, but as the economy improves, consumers will have a higher income which will enable them to spend more.

“I think, three things – good monsoon, given the fact that GST will get rationalised and generally inflation has come down – will help consumer sentiment. We expect demand to improve as we go forward,” said Agrawal, who is hanging up his boots next year after leading Wipro’s Consumer business for over two decades.

Wipro Consumer Care & Lighting entered the packaged food industry by acquiring Nirapara in December 2022 and Brahmins in April 2023, focusing on spices, ready-to-cook meals, and traditional snacks in the Indian market, particularly the south.

Under the current GST regime, consumer goods, including food items, are under the 18 per cent tax slab.

However, all food products, including biscuits, spices etc are proposed to be placed under 5 per cent in the proposed new GST regime.

The GST Council, chaired by the Union Finance Minister and comprising ministers from all states and UTs, will meet on September 3 and 4 to discuss reforms proposed by the Centre that mooted most goods be charged at either 5 per cent or 18 per cent. PTI KRH MR