Diwali 2023: Lighting Up India’s Economic Prospects

With Diwali approaching, India Inc. is experiencing a shopping spree, marked by a surge in corporate gifting orders. This year’s festive season is expected to witness slightly improved consumer spending compared to 2022. The Indian festive spending spree is bolstering one of the world’s fastest-growing economies, reflected in the 13% increase in India’s goods and services tax (GST) revenue to Rs. 1.72 lakh crore in October.

Online platforms like Amazon and Flipkart reported nearly a 20% increase in sales during the first week of festive sales compared to the previous year. Unified Payments Interface digital transactions saw a remarkable 40% surge in October compared to the previous year. Amazon’s Great Indian Festival 2023, which commenced on October 8, 2023, saw a record 9.5 crore customer visits within the first 48 hours, with nearly 80% of customers hailing from non-metro cities.

According to CRISIL, the revenue of brick-and-mortar apparel retailers is anticipated to grow by 7-8% this year, driven by the festive and marriage seasons. However, revenue density, calculated as revenue per square foot, is expected to remain below pre-pandemic levels.

Indian automakers have plenty to cheer about this festive season as car sales surge. Maruti Suzuki reported a 19.7% year-on-year sales increase in October, while Hyundai Motor India nearly matched this with an 18% growth. Toyota Kirloskar Motor saw a significant 66% rise, and Tata Motors grew by 7%. As the final phase of the 2023 festive season approaches, automakers are optimistic about strong demand and record-high festive season sales.

In October, Indian Railways’ freight loading increased by 8.47% to 129.03 million tonnes. Consumption is expected to receive an additional boost from the Cricket World Cup and the upcoming wedding season. However, the S&P Global India Manufacturing Purchasing Managers’ Index (PMI) decreased to 55.5 in October, its slowest expansion since February. India’s long-term success hinges on its ability to create sufficient jobs to harness its substantial demographic dividend.

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