Diwali 2022: Catalysing India’s Growth Momentum
After two years of combating the Covid-19 Pandemic, encountering numerous restrictions, and staying indoors, India is again celebrating its festivals with the same enthusiasm and optimistic spirit! The revival of Consumer Sentiment is a significant impulse for India’s rebounding economy. A survey by the Centre for Monitoring Indian Economy indicates that consumer sentiments climbed to a 30-month high in September 2022.
Diwali cannot be celebrated with the same joy if any segments of our citizens are left behind; keeping this in mind and to boost the agriculture sector, the Government released the 12th instalment of The PM KISAN scheme ahead of the festive season. Under the latest instalment, Government will transfer ₹16,000 crores to over eight lakh farmers through direct benefit transfer.
Macro and Micro Parameters
Ahead of Diwali, the unemployment rate dropped to the lowest in four years, helped by a substantial rise in new jobs, according to data from the Centre for Monitoring Indian Economy Pvt, making Diwali a Happy Diwali.
What could be a better Diwali Gift than stable and booming Economic parameters? The Macro and Micro Economic indicators predict an optimistic viewpoint in the Supply and Demand chains. According to a report by FADA, overall retails of Automobiles boosted by a spectacular 57% during the Navratri.
Whether small or grand, gifts portray unified emotions regardless of their value. As per an estimate, about five crore gifts are exchanged during the Diwali festival, substantially contributing to Diwali festive sales.
It is a well-known fact that manufacturing is a vital component of our Economic backbone. The light of Diyas has also lighted the manufacturing sector, and the same is regaining momentum; electricity consumption, a widely used proxy to measure Demand, increased from the previous month.
Customer Sentiment and FMCG Sales
India’s International Recognition is due to its stable micro-parameters and growing internal Demand. Diwali 2022 is catalysing India’s Growth Story. The Confederation of All India Traders predicts that sales during Diwali this year will be up 30% compared to 2021.
According to a report by consulting firm Redseer, two prominent online sales led by Amazon and Flipkart are projected to register revenue worth Rs 41,000 crore, a 28% increase over last year during the first festive week. For the first four days (September 22nd–September 25th), e-commerce platforms clocked sales of 24,500 crores, contributing to about 60% of the projected festive sale in the first week itself.
The Covid-19 pandemic slowed every sector, but a few sectors, like tourism, stalled. With a substantial stimulus by the Government in the past year and increased consumer confidence, Diwali has raised hopes and aspirations for the tourism sector. According to a search engine, KAYAK — October 21st 2022, would be the busiest day at Indian airports as citizens look to travel to their hometowns or leisure destinations. It also has to be noted that international destinations are emerging as go-to places for Diwali, despite higher fares than pre-Covid levels. A double room in a three or four-star hotel overseas for Indian travellers ranges from Rs. 15,000 to 18,000, around 24% higher than pre-pandemic levels.
State Government Measures
State Governments are coupling in igniting public sentiments. The Gujarat government announced providing two free LPG cylinders to Pradhan Mantri Ujjwala Yojana beneficiaries. The decision will assist around 38 lakh people across Gujarat. Also, the Maharashtra cabinet is providing grocery packages at Rs 100 to ration card holders for the upcoming festival. Maharashtra government has approved Rs 513 crore for the same.
UPI Transactions and Global Sentiment
All the schemes, data and policies mentioned above have promoted consumer spending, which can be tracked through domestic transactions. The UPI recorded 678 Cr transactions in September 2022, a growth of 3.2% from August 2022. Meanwhile, the transaction volume grew 4% month-on-month to Rs 11.16 Lakh Cr during September, surpassing the 11 Lakh Cr mark for the first time. The positive sentiments have raised India’s Global Attention; according to a report released by EY-CII, 71% of Multi-National Companies consider India a strategic destination for global expansion. Most MNCs feel – that the Indian economy will perform exceptionally better in 3-5 years and the long term. MNCs also appreciate the impact of GST, the Government’s digital drive in diverse sectors, and transparency in taxation.
According to International Monetary Fund’s World Economic Outlook database, India may evolve into the third biggest economy after the United States and China in the coming five years.
While many countries are tackling the tricky situation of the appreciating Dollar, India’s forex reserves are comfortable at a nearly $550 billion fiscal mark. The banks are in a powerful position, and the credit cycle is picking up. Though IMF has lowered India’s GDP growth forecast for 2022-23 to 6.8% from 7.4%. Yet, India is growing swifter than other G20 nations except for Saudi Arabia. In 2023-24, according to the IMF, India’s GDP can grow by 6.1%, the highest in the G20.
Diwali 2022 will be an inclusive Diwali. Farmers who make sure we don’t go hungry will have something to cherish, the MSMEs and informal businesses are witnessing a spark in sales after a lag of two years, the Manufacturing industry is back on track, and the young generation will get an opportunity to apply for new jobs. Unemployment is lowering, and Middle Class has considerable disposable income. Diwali is catalysing India’s Economic recovery and Catalysing India’s Growth Momentum.