- Why a slab reset now? (inflation, compliance, simplicity)
- Scenario map: compression vs. targeted cuts
- Sector impact table (FMCG, Autos, Insurance, Dining, Appliances)
- Pass-through dynamics: price vs. pack vs. promo
- Execution risks and a realistic timeline
The short
- Policy logic: Fewer slabs simplify compliance and reduce classification disputes.
- Demand impulse: Selective cuts at mass price points can lift entry-SKU volumes faster than premium tiers.
- Fiscal guardrails: Neutral-to-mild revenue impact if offset by base-broadening, compliance gains, and pruning exemptions.
Why a reset now?
With inflation moderating and compliance infrastructure maturing (e-invoicing, e-way bills), a rationalisation can swap complexity for clarity. Politically, it signals relief for households and MSMEs without a large revenue shock—if designed right.
Scenarios you should model
Scenario A — Slab compression
Merge mid-slabs into a simpler ladder. Pro Less litigation, easier pricing. Con Transitional rate anomalies; one-time ERP resets.
Scenario B — Targeted cuts
Lower rates for insurance, small cars, dining, and select essentials. Pro Visible relief. Con Revenue foregone unless offset.
Sector impact (first-order)
| Sector | P&L lever | Near-term effect | Notes |
|---|---|---|---|
| FMCG (mass) | MRP resets / grammage | Volume uplift on entry SKUs | Watch promo intensity and retailer pass-through. |
| Autos (small cars / 2W) | On-road price | Booking momentum improves | Finance/insurance add-ons amplify the cut. |
| Insurance (health/life riders) | Premiums | Better take-up, persistency | Digital channels benefit most. |
| Dining/QSR | Ticket size | Higher frequency | Delivery platforms pass-through lag can blur impact. |
| Consumer durables | Sticker price | Pre-festive pull-forward | Channel inventory cycles matter. |
Pass-through: the real driver
- Price-led: Full pass-through drops MRPs—fast demand response but margin-neutral.
- Margin-led: Keep MRPs; expand trade margins or reduce promo spends—slower demand pop, EPS positive.
- Pack-led: Reset grammage/sizes to defend price points—works best at ₹5–₹20 ladders.
Execution risks
- Rate-fit disputes for borderline SKUs during transition.
- IT/ERP reconfiguration and label compliance timelines.
- State-level sensitisation for restaurant/platform categories.
Timeline reality: Announce → notify rules → trade inventory run-down → new MRPs on-shelf (4–10 weeks, category-dependent).
What to watch
- Council note + fitment committee minutes
- Auto/insurance line-item breakouts in invoices
- Scanner data: unit lifts at entry price points