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Thursday, February 25, 2021

Budget 2021-22: Investors are happy, households not so much

While the investors express their happiness, there is displeasure among households which was highlighted after the new budget 2021-22.

The Centre for Monitoring Indian Economy stated that the value of BSE-30 companies has arisen by 5% and the Nifty-50 companies rose by 4.7% on the day of the Budget, which is an indication that the investors were happy with the Budget 2021-22. In an article written by CMIE CEO Mayesh Vyas stated that, it is pretty unusual for value of these companies to rise by 2% on an average day.

While the investors are expressing their happiness, there is a lot of displeasure among households which came to be highlighted after the new budget 2021-22. The Centre for Monitoring Indian Economy observed this displeasure after a week of the new budget, where the Consumer Sentiments Index fell by 4.2%.

In the CMIE article, it stated that “Contrast this with the nearly 9% increase in the equity market valuations response to the budget on the bourses. Household were not very impressed with the budget.”

According to the article the budget 2021-22 may or may not be the exact reason for the weakening of the households after the budget, but the sentiments have worsened after it. The proportion of households which believed that the financial or business condition would improve in the upcoming year, declined from 5.5% (which was the week before) to a significant 4.8% after the budget release. Now the households who believed that conditions would get worst increased from 44.9% to 46.5%. The CMIE article also further added that the expectations over five years are bad if not worse.

Report: The E-Commerce grows by 36% in India:

The quarter of 2020 saw the order of the e-commerce platform volume grow by 36% in India with the segment of Personal Care, Beauty and Wellness being the major beneficiary.

According to the reports released by the Q4-2020-E-Commerce Trends Report by Unicommerce and Kearney, the period of October to December 2020, volume of categories in PCB&W and FMCG & Healthcare (F&H) hiked by 95% and 46% year-on-year.

The report which evaluates the Q4 2020’s e-commerce growth with a sector-wise analysis stated that brand websites reported a volume growth of 94% in the fourth quarter of 2020 as compared to the time last year.

2020’s last quarter saw e-commerce platforms grow by 36% and 30% in terms of order volume with year-on-year and gross merchandise value respectively, whereas the average value of order declined by 5% in Q4-2020 in comparison to last year.

After the Budget 2021-22, 26% order volume growth was reported by the e-commerce industry in Q4-2019 in relation to Q4-2018.

The restriction to venture out due to lockdown resulted in a first-time grocery shopping for people, which made it an important category for mainstream e-commerce platforms like the Flipkart or Amazon to actively focus on promoting the grocery business and look at its growth.

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