The festive season seemed dull amid the current economic slowdown
“Itna sannata kyun hai bhai (Why there is so much silence)?” read an editorial of the leading Marathi newspaper, ‘Saamana’, promoted by Shiv Sena, a far-right based political party in Maharashtra.
The epic dialogue is taken from one of the biggest blockbusters of Bollywood – Sholay. The editorial appeared in the newspaper a day after Diwali. The dialogue took a dig at Bhartiya Janata Party (BJP) for the ongoing economic crunch in the 3rd largest Asian economy, i.e., India.
In the editorial, Shiv Sena said, “Today, our country is facing economic slowdown. In the market, there is no excitement at all. Due to slowdown, the business is less by 30 to 40 percent.”
The editorial piece also mentioned that Demonetisation and the Goods & Services Tax (GST) were the major factors responsible for economic slowdown.
Hitting at the BJP for increasing rate of unemployment, the editorial read, “Factories and industries are being shut down. Employment is not there. People are losing jobs.”
It also lashed out at the Centre for borrowing Rs. 1.75 lakh crores from Reserve Bank of India (RBI). The Ministry of Finance had announced that till FY 2020, the Government will borrow a total of Rs. 7.1 lakh crores.
“Banks are getting bankrupt. Peoples’ pockets are empty so is the government’s Tijori [locker]. Therefore, reserved money from the RBI was taken out,” said the editorial.
Separately, as per a report by transaction processing company, Worldline, the jewellery and apparel shopping have been severely hit during this Diwali, owing to economic slowdown. The average value of card transactions in the two affected segments dipped by a significant margin as the Gross Domestic Product (GDP) growth slowed to a 6-year low.
The average ticket size in jewellery retail dipped by 66% to Rs. 3,625 during Dhanteras and Diwali, while the same for apparel stores dipped 28% to Rs. 1,746. The drop in the average ticket sizes has happened even as there has been a 20% rise in a precious commodity prices over the last year.
The auspicious Dhanteras was muted affair with sale of gold and silver dipping by huge 40% !. On Friday, i.e., October 25, 2019, gold prices rose by Rs. 220 to Rs. 39,240 per 10 gram in the national capital, up by 20% compared to 2018.
According to the Confederation of All India Traders (CAIT), about 6,000 kgs. of gold worth Rs. 2,500 crores were sold till evening on Dhanteras day, as against 17,000 kgs. of gold worth Rs. 5,500 crores, during the same period in 2018.
The Chairman of All India Gem and Jewellery Domestic Council (GJC) – Anantha Padmanaban said, “In volume terms, we expect sales to be 20 per cent less than last year. In terms of value, it will be same as last year because of higher prices.”
Besides, Diwali is a time when everyone, working or studying in another city, leaves no stone unturned to travel back to their city and celebrate the festival of lights with their family. Usually, airlines witness a huge rush during Diwali season. However, this time, there has been a reluctance on spending on air ticket. A few airlines had to even lower the airfares to fill up their planes.
According to data from the travel portal, Yatra.com, the fares on key metro routes were down by 30%.
“The slowdown is beginning to bite us. The demand for air travel is not growing as compared to the same time last year. As a result, our yields (average fare per passenger mile) are lower. I don’t see this improving for several months to come. This is an industry-wide trend,” said a top official at one of the leading airlines on the condition of anonymity.
Talking of auto sector, the estimates shared by a Federation of Automobile Dealers Association (FADA) reveal that people refrained from buying vehicles this Dhanteras. In a normal 42-day festival period between the onset of Onam and Diwali, around 4 lakh cars and 20 lakh two-wheelers are sold. However, sales of these two categories so far have been at around 3 lakh units and 16 lakh, respectively.
Speaking on the occasion, the National Sales Head, Hyundai Motor India – Vikas Jain, said, “If compared to the festive season before 2018, the drop would be bigger. As per numbers tracked by us, there is a drop of 8-10% y-o-y in retail industry volumes this October.”
Around 20% of the entire year’s sales happen during the 42-day period, of which over 10% happen during Diwali. Since demand during most of the festive season till Dussehra was a complete washout, there were no major expectations of an uptick in consumption, as discounts notwithstanding, bookings remained below average. Most auto makers lowered their festive season sales target and are trying to keep lean inventory.
As regards corporates, they too refrained from gifting expensive items to clients. The corporates confined themselves to sweets and nuts. The corporate gift industry which worked overtime during Diwali, experienced a lull this season.
The owner of an 80-year-old gift packaging firm, Rainbow Dry Fruits – Jatin Shah said, “In previous years… we would work till two in the morning. Now since the orders are lower in size and scale, we finish work and pull down the shutters by 10 pm.”
He even said that orders for the cheapest items, small boxes of almonds, walnuts, and cashews, fell by more than half, bringing down the firm’s annual turnover down by 35%.
Besides, the General Secretary of Indian National Congress (INC) – Priyanka Gandhi Vadra said on Monday, i.e., October 27, 2019 that BJP is hampering India’s prosperity. She also alleged that the government has severely weakened the Reserve Bank of India.
कल पूरे भारत में सम्पन्नता और धन-धान्य का त्योहार मनाया गया। लेकिन इस बार सबको ये लग रहा है कि दिवाली कुछ फीकी बीती।
— Priyanka Gandhi Vadra (@priyankagandhi) October 28, 2019
भाजपा सरकार ने पूरे देश की संपन्नता को बट्टा लगा दिया है। रिजर्व बैंक को बेहद कमजोर हालत में ला दिया है।https://t.co/3Cx0dvvhyE
Talking about slowdown, she tweeted, “Yesterday, a festival of prosperity and wealth was celebrated all over India. But this time everyone is feeling that Diwali has been somewhat dull. The BJP government has hit the prosperity of the entire country and has severely weakened the Reserve
Bank of India.”
