New Delhi, Feb. 1 -- There is a spring in the step of Indian consumer-related companies after the budget 2025's proposal to make income up to Rs.12 lakh tax-free under the new tax regime. With more disposable income in the hands of millions of taxpayers, the expectation is that consumers would be encouraged to spend more on items like staples, electronics, clothes, footwear, restaurants and travel.

In the process, the government forgoes revenue of around Rs.1 trillion in direct taxes. Sure, the move is a game-changer and is expected to offer the much-needed stimulus to demand, helping consumer companies that are finding it tough to boost sales amid moderating urban demand and a slow rural recovery.

But a rising tide may not lift all boa...