~ Muskaan Malhotra and Nishita Rijhwani
INDIA AS A FESTIVE ECONOMY
With a holiday to celebrate every month of the year, India is undoubtedly the land of festivities. Starting in September, the country witnesses a distinct excitement around the biggest Indian festivals. A festival not only has a huge impact on the social and cultural environment, but it also impacts the economy. That is why India is known as a Festive economy and the biggest festival in Indian Culture is Diwali - The Festival of Lights!
BOOM SEASON!
The festive spirit is palpable as Diwali approaches. In spiritual countries like India, festivals show a significant influence on economic activities. Diwali, which is one of the most important festivals in India, has its influence on the economic activities of the country. Shoppers are back in force online and in stores, splurging the festive season after the coronavirus pandemic damped celebrations and consumption in previous years.
a) INCREASED SALES
During the Diwali season, people exchange presents. As a result, demand for items increases:
Consumer Items:
Around this time of the year, sales of textiles, automobiles, consumer durables, electronic items, jewellery , real estate and food items pick up. Consumers tend to increase spending during Diwali as it is considered the auspicious time of the year.
Handicraft Industries:
Even the unorganized sector gets benefits during Diwali. Artisans who mostly reside in rural areas see significant growth in their sales with greater employment as a cascading effect. Hence, artisans selling diyas, lamps and decoratives see a rise in their earnings.
b) BOOM FOR SHARE MARKET
Mahurat trading is trading performed on the stock exchanges in India for an hour in the evening on the occasion of Diwali. Mahurat trading has been observed on Bombay Stock Exchanges for ages. The main reason to perform Mahurat trading is to welcome the new financial year with a positive sign. Investors who buy stocks on Mahurat trading may hold them for a long period and even sometimes they never sell such stocks. It is commonly believed that mahurat trading brings wealth and prosperity throughout the year.
c) TOURISM SECTOR
The extended weekend holiday of Diwali spikes travels among Indians with players in the hospitality and tourism sector witnessing a surge in demand. As customers make the most of the five to nine days opportunities for a festive vacation with family and friends, domestic tourism witnesses a forward booking surge. Hospitality and travel-tech firm OYO, citing its 'Festive Season Report 2022' said there has been a rise of 108 per cent in demand as against last year during the upcoming Diwali holidays between October 22, 2022.
d) BOOM FOR E-COMMERCE COMPANIES
The festive season is one of the biggest drivers of online purchases, which are increasing in scale, variety and promotions. The period leads to abrupt surges in spending and creates an uplift in the e-commerce market.
Amazon.in - Amazon starts preparation for the festive season months ahead of time. Amazon India, announces its 'GREAT INDIAN FESTIVAL’ usually a week before the festival. The Diwali special sale offers deals and discounts on bestsellers, electronics, phones, etc.
Flipkart - Similar to Amazon India, online shopping giant Flipkart organizes multi-day sales, such as their sale period - the 'Big Billion Days Sale" and then the 'Big Diwali Sale’ offering huge discounts.
These online marketplaces saw sales jump of 27% from a year ago to $5.7 billion during the festival season’s first sale between September 22-30.
e) VEHICLE BONANZA
New vehicle sales jumped 57% from a year ago during the nine-day ‘Navratri’ period that precedes Diwali, data from the Federation of Automobile Dealers Associations show.
India’s largest carmaker Maruti Suzuki India saw demand for its cars rise 20% year-on-year, led by its premium offering. “The growth numbers have been uniform in both urban and rural centres,” said Maruti’s executive director Shashank Srivastava, with higher interest rates doing little to suppress demand.
f) DIWALI GOLD
Buying gold at Diwali is a religious act considered auspicious and thought to bring good fortune as well as prosperity. Demand is so high during Diwali that Diwali makes up 1/5 of annual gold purchases in India! Specifically, jewellers and gold bullion dealers in India commonly report a 20-30% increase in sales leading up to Diwali. Reportedly, many shoppers save up to make big-ticket purchases at this time. Although the precious metal has yet to rise back to its post-Brexit prices, the Diwali season has historically positively impacted gold prices due to high demand.
Promoting a Green Diwali
Due to the growing awareness about the impact of Diwali on the environment, many people buy earthen lamps and are reducing the number of firecrackers that burst during the festival making it more of a festival of lights now rather than a festival of firecrackers. This year the Union Health Minister, Dr Harsh Vardhan, launched eco-friendly, green firecrackers. Developed by the Council of Scientific and Industrial Research (CSIR) and manufactured by licensee manufacturers, these sparklers and other crackers will help people celebrate Diwali the traditional way, with firecrackers, while reducing pollution. This comes as welcome news as these are not only environmentally friendly but will also help retain the livelihood of so many benefitting from the manufacture and sale of fireworks.
So, let’s light up our homes, hang Diwali decorations and send out Diwali gifts with the aim to make it a bright, happy and inclusive Diwali for all.