The cry for a boost to revive India’s consumption story turns louder as the day of the Union Budget for 2025-26 nears. Higher interest rates, tepid salary hikes, poor job prospects, and a host of factors have sent out warning signals for consumer services startups and B2C tech companies across sectors.

The urban FMCG and retail sector, a key driver of India’s consumption narrative, has suffered a major slowdown in the mass-market segments through most part of 2024 with companies reporting a slump in sales.

D2C brands and ecommerce marketplaces have so far staved off the slowdown that legacy FMCG and retail players have been grappling with – largely because of premiumisation and deep discounting – but a deceleration is on the horizon, alerted experts, unless there’s a revival in consumer spending.

As Finance Minister Nirmala Sitharaman gears up for the Union Budget 2025-26 to be tabled on February 1, there is mounting anticipation that she will propose measures to stimulate consumption even for the new-age economy.

A sequential recovery in consumer demand came as a breather for both urban and rural markets in the third quarter of 2024. Rural markets, however, outsmarted cities with consumption growth accelerating at 6% from 5.2% in the previous quarter, as against a 2.8% rise for urban markets from 2.1% in this period, according to a NielsenIQ report.

Consumers, both in villages as well as in cities, have significantly cut down on non-food items, showed the Household Consumption Expenditure Survey 2023-24, released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday. Rural households reduced expenses such as medical care, education, rent, fuel, and durable goods. Their urban peers spent less on items like paan, tobacco, fuel, medical care, transport, durable goods, and consumer services. This........

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