The Diwali consumer data shows that the Indian economy may shine with a revival in demand
While newly-elected British Prime Minister Rishi Sunak is being celebrated with great glee, it is not he but the Indian consumers who are adding glory to India. They have taken enough strides this Diwali to turn the corner for the Indian economy after gloomy years of the pandemonium shut country.
Indian consumers are back with enthusiasm but there are grey areas indicative of the post-Covid bumps. Amid such a scenario, gold, housing and automobiles made a significant mark. Consumers purchased 39 tonnes of gold and billions of rupee purchases of housing units, cars, white and brown goods, textiles, garments, and other purchases.
Demand for gold grew by 80 per cent in the domestic market in the July-September quarter following a strong pick-up in economic activity and improved consumer demand, said Pankaj Arora, president of All India Jewellery and Gold Federation. As per its estimates, sales of gold and silver coins, notes, sculptures, and utensils in the country peaked at Rs 25,000 crore. The Indian Bullion and Jewellers Association (IBJA) pegs it at Rs 19500 crore a little higher than 2021.
There are indications of economic buoyancy coming back. The ANAROCK July-September housing sales data are up 41 per cent, possibly touching three lakh units as the trend was for 2009-2014. Since that year sales dropped by almost 68 per cent in Delhi and NCR and 27 per cent around Mumbai. The worst was 2016 when unit sales dropped drastically due to demonetisation followed by the unveiling of RERA and GST. The housing is double-taxed. It has stamp duty
and now also GST, which should better be waved
off. The housing sales rise despite interest rate hike is encouraging.
Similarly, car sales jumped by 10.94 per cent to 1,464,001 during Navaratri and Diwali against 2021 sales of 1,319,647 units, according to the Federation of Automobile Dealers Associations of India (FADA). Sales rebounded as semiconductor shortages eased. The Society of Indian Automobile Manufacturers (SIAM) said that the production for the month also rose 88 per cent to 372,126. Sales of entry level passenger cars grew by 38.4 per cent or 1,026,309 units, while two-wheeler sales rose by 13 per cent at 1,735,199 units.
Though gold purchases considered auspicious may have taken place almost uniformly across, there has been subdued sales of FMCG products in the rural areas with retail inflation holding firm. The Marico group noted that the sales in the rural areas are much below the norm.
Confectionery sales declined 10.3 per cent and beverages and home care slumped by 2.5 and 5.5 per cent owing to change of preferences and quality complaints about the products. Neighbourhood political relations also have an impact on dry fruits and spices. The machineries have been careful and slow in clearing the dry fruit packages of raisins, pistachios, apricot, figs, asafoetida and shah jeera coming from Afghanistan transiting through the Wagah border.
The textile segment also had an average business. Surat’s textile mills could have about Rs 8000 crore or 50 per cent less sales. The retail demand has been low
indicating that people at large are avoiding purchases. Wholesalers are not picking up garments, sarees and other fabric because of a market singed by high prices and miserly consumer behaviour, according to Confederation of All India Traders. Huge inventory from the last two
years with retailers has cut overall sales.
Often it is alluded that
e-commerce led by global giants has affected the retail business. According to the World Bank, e-commerce is only 1.6 per cent of the total Indian retail business. The e-commerce firms expected that their sales would reach $11.8 billion, according to Shopify, before Diwali but so far they have not come out with a figure of the final sales. Softbank-propelled Meesho claimed there have been low-ticket purchases and two majors -- Flipkart and Amazon -- clocked the larger share of the $5.7 billion or Rs 40,000 crore festive sales, with mobile phones leading the sales.
Global instability, inflation, and the Ukraine war are hitting the country despite efforts at a higher growth
trajectory. This growth is now swinging below 7 per cent with over 7.4 per cent (cumulative 23.6 per cent) inflation. It is beyond the RBI comfort zone.
Does it mean that by volume India could surpass Britain? Not unlikely but a lot remains to be done to be actually becoming the fifth largest economy as during covid certain hardships increased and indicators plummeted. Indian per capita GDP is $2,277.43 and the UK’s $49,761. The UK has a robust trade balance. Diwali has given hopes that by the coming year India would get rid of the glitches and make its journey more meaningful.
(The author is a senior journalist)
