Why Diwali is not the blast it is made to be
Bank of India (RBI), available on a daily basis, shows that card spends this October at shops and on e-commerce sites was about 17% higher than in October 2022. In absolute terms, that’s a ₹29,000 crore increase. The data covers spending on credit cards, debit cards and prepaid cards.
The same data is also available for the first eight days of November. This period typically accounts for 27-30% of the total spending in November. Assuming a rate of 30%, this implies that total spending for October and November will be higher by 22%, or ₹69,000 crore, over the same period in 2022.
There is always a fair bit of excitement about festive season sales, with some reason. On just one day last month—9 October—card spends soared to ₹15,300 crore, more than double of what was spent around those days last year. The Confederation of All India Traders, an industry grouping of traders, forecast ₹3.5 trillion of business during the festive season.
But upbeat sentiment in Diwali is unevenly distributed. As a Mint story noted recently, consumption recovery after the pandemic has been ‘K-shaped’. Some segments of the economy, especially rural households with precarious income and marginal farmers, have not fully recovered from the covid-19 pandemic’s economic contraction and its after effects, and are more cautious.
In comparison, those with stable incomes, especially high incomes, have been spending on non-essentials. Earnings of casual workers and the self -employed actually declined from July-September 2022 to April-June 2023, according to data from the government’s Periodic Labour Force Survey. Festive season sales are a global phenomenon.
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