FMCG dominates other commodities in retail

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The retail of fast-moving consumer goods (FMCG) is going to dominate India’s retail sector for a few years as the private consumption of these products is estimated to be high from this fiscal.

According to the government report on Revised Estimates of Annual National Income and Quarterly Estimates of Gross Domestic Product 2007-2008, Indian households and non-profit organisations are spending more on consumer goods. This year, the Private Final Consumption Expenditure (PFCE) is estimated at Rs 2,607,584 crore as against Rs 2,312,105 crore in 2006-2007.

PFCE is the sum of household expenditure made on consumer goods and services and the final consumption expenditure on non-capital items of private non-profit organisations serving households. Thus, according to the estimates, if the PFCE rises, India will definitely see a rise in the retail of FMCG products.

The entire retail sector in the country is going to be helped by rising consumptions as per capita income is estimated to up by a considerable margin. The estimates reveal that the present per capita income in real terms is at Rs 24,321 as against Rs 22,553 for the year 2006-2007.

Besides, the national income of the country is estimated 9.4 per cent to 2,767,682 crore as compared to Rs 2,767,325 in 2006-2007. The Gross Domestic Product (GDP) at factor cost of current prices is estimated at 13.6 per cent to Rs 4,303,654 crore as compared to Rs 3,325,817 in 2006-2007.

All these estimates reveal a rising economy, which will eventually increase consumption, help retail to emerge as dominating business sector in the country.

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